WINDHOEK, Aug 13 (Reuters) – Namibia’s central bank left its main interest rate unchanged for a third straight policy meeting on Wednesday, and said it wanted to safeguard the peg between the local currency and the South African rand while supporting the domestic economy.<\/p>\n
Neighbouring South Africa, whose economy is closely interlinked with Namibia’s, reduced<\/a> its rate by 25 basis points last month.<\/p>\n Sign up here.<\/a><\/p>\n “Maintaining the repo rate unchanged, while the anchor country’s repo rate was reduced in July, was a further step towards narrowing the interest differential between Namibia and South Africa,” said Bank of Namibia Governor Johannes !Gawaxab.<\/p>\n !Gawaxab said Namibia’s rate, now 25 basis points lower than South Africa’s, struck a balance between fostering local economic growth and sustaining stable capital flows.<\/p>\n The bank lowered inflation forecasts for 2025 and 2026 by 0.1 percentage points on Wednesday to 3.8% and 4.2% respectively, to reflect lower crude oil price assumptions.<\/p>\n Inflation in the southern African country stood at 3.5% in July (NACPIY=ECI), opens new tab<\/a>.<\/p>\n The central bank lowered its economic growth forecasts for this year and the next on Monday, citing a challenging environment for the agriculture, mining and manufacturing sectors.<\/p>\n It expects GDP growth of 3.5% in 2025, down from 3.8% projected in June<\/a>, and 3.9% in 2026, lower than the 4.0% previously forecast.<\/p>\n Reporting by Nyasha Nyaungwa; Our Standards: The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n
\nWriting by Sfundo Parakozov;
\nEditing by Alexander Winning and Rachna Uppal<\/p>\n