FX.co ★ Bank of Namibia Lowers Key Rate to 6.5%

In its October 2025 meeting, the Bank of Namibia reduced its benchmark repo rate by 25 basis points, bringing it to 6.5%. This decision was made to bolster the domestic economy while maintaining the currency peg between the Namibia Dollar and the South African Rand. Recent data showed a slowdown in annual GDP growth, declining to a post-pandemic low of 1.6% in the second quarter, compared to 2.8% in the first quarter. This decrease is primarily attributed to subpar performance in the manufacturing, fishing, and agriculture sectors. For 2025, economic growth is now expected to decline from the 3.7% recorded in 2024, with downside risks becoming more evident. Meanwhile, inflation has remained contained, averaging 3.6% over the first eight months of the year. Inflation projections for 2025 and 2026 have been adjusted downward by 0.2 percentage points to 3.6% and 4.0%, respectively, due to assumptions of a stronger exchange rate and lower oil price forecasts.