The Central Bank of Namibia has cut the country’s lending rate by 25 basis point to 7.25%. The Monetary Policy Committee of the bank announced the cut at the end of its meeting today. The interest rate cut comes on the back of declining inflation figures in the country.
Bank of Namibia Governor Johannes Gawaxab announced the rate cut. He said “The MPC noted the growing momentum in the international monetary policy easing cycle, the retreat in domestic inflation over the medium term, along with the recent downside surprise in the September 2024 inflation print”
The decision to cut the rate did not come as a surprise given the reduction in inflation.
Namibia’s inflation rate dropped from 4.4% in August to 3.4% in September. The drop has made the bank to revise its inflation forecast for 2024 to 4.3% from the 4.7% posted in August. It attributed the revision to a favourable international oil price and a stronger currency.
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Interest rate is the amount lenders have to pay to access funds from deposit money banks. It also gives a picture of the gains to expect from an investment. With this rate cut, Namibia is hoping to ease the burden of business owners so that they can have access to more facilities and help boost economic growth.
Namibia’s economy is projected to grow by 3.1% this year compared to last year’s 4.2%. The government is therefore targeting more growth with the rate cut.
