The Bank of Namibia left its benchmark repo rate unchanged at 6.75% at its August 2026 meeting, after raising it by 25 basis points in June. Policymakers stated that the current stance remains appropriate to support international reserves and to preserve the Namibian dollar’s one-to-one peg with the South African rand.
The Monetary Policy Committee highlighted rising domestic inflationary pressures and weaker economic activity since its previous meeting. Annual headline inflation accelerated to 4.4% in June from 4.1% in May, largely due to higher transport costs. Inflation is projected to average 4.0% in 2026 before easing slightly to 3.9% in 2027, with the 2027 forecast revised up by 0.3 percentage point in light of heightened tensions in the Middle East.
Economic activity slowed in the first half of 2026, as declines in mining, manufacturing, electricity generation and transport were only partly offset by stronger performance in agriculture and retail. Real GDP growth is now expected at 2.1%, down from a previous forecast of 2.6%. The outlook remains subject to downside risks, including weaker global growth, the impact of foot-and-mouth disease, and the potential effects of an El Niño weather pattern.
