The Bank of Namibia (BoN) has decided to increase the repo rate by 75 basis points, to 6.5%.

The central bank also warned that inflation, which is the main cause of the repo rate, will persist for a longer period of time, driven by factors beyond Namibia's control.

When the central bank pushes up the repo rate, it does so in response to and to arrest runaway inflation.

These hikes discourage borrowing and reduce the amount of money in the economy, meaning fewer resources to spend.