In response to the announcement by the Monetary Policy Committee of the Bank of Namibia (BoN) to cut the Repo rate from 4.25 percent to 4 percent as announced on 17 June 2020, Bank Windhoek has announced a reduction of its Prime Lending Rate by 0.25 percent from 8 percent to 7.75 percent.
The bank’s Mortgage Lending Rate will decrease from 9 percent to 8.75 percent, effective from Tuesday, 23 June 2020.
“While the possibility of more cuts cannot be ruled out at this point, we expect that the benefit from the sharp cuts will gradually alleviate the debt burden of our clients. This should see some recovery in economic activity,” Diederik Kruger, Head of Funding and Liquidity Management at Bank Windhoek said.
According to the central bank, the decision was taken following a review of global, regional and domestic economic and financial developments, and will safeguard the one-to-one link between the Namibia Dollar and the South African Rand.
Latest figures from the central bank show that average growth in private sector credit extension (PSCE) slowed to 5.8 percent during the first four months of 2020, lower than the rate of 6.4 percent recorded over the same period in 2019.
The slowdown in PSCE according to BoN was due to lower credit demand by businesses.
Since the previous MPC meeting, growth in PSCE slowed to 3.7 percent at the end of April 2020, from 6.7 percent reported in the previous MPC statement.”