The Monetary Policy Committee (MPC) of the Bank of Namibia (BoN) resolved to keep the repo rate unchanged at 3.75 percent, Governor Johannes !Gawaxab, announced yesterday, on Wednesday.
“The MPC is of the view that the rate remains appropriate to continue supporting domestic economic activity, while at the same time safeguarding the one-to-one link between the Namibia Dollar and the South African Rand. This decision was taken following a review of global, regional and domestic economic and financial developments.”
Namibia’s stock of international reserves as on the 31st January, 2021, according to BoN, stood at N$34.4 billion compared to N$29.9 billion reported in the December 2020 MPC statement.
“The increase in reserves was mainly due to SACU receipts. The latest amount of international reserves is estimated to cover 5.3 months of imports. At this level, the reserves remain sufficient to protect the peg of the Namibia Dollar to the South African Rand, while meeting the country’s international financial obligations,” !Gawaxab said.
The apex bank said domestic economic activity slowed considerably in 2020 compared to 2019, mainly due to the devastating effects of the COVID-19 pandemic, although a moderate recovery of 2.6 percent is expected this year.
“Contractions were observed in key sectors such as tourism, wholesale and retail trade, mining, manufacturing, construction, as well as transport and storage. On the contrary, activity in the telecommunication and local electricity generation subsectors improved during the same period. The domestic economy is estimated to have contracted by 7.3 percent in 2020, before returning to an expected moderate recovery of 2.6 percent in 2021,” the Governor said.