Chamwe Kaira
Namibia’s international reserves fell sharply at the end of October 2025, mainly because of the government’s eurobond repayment, the Bank of Namibia (BoN) said in its latest money and banking statistics report.
The reserves declined by 11.2% from September and by 20.2% from a year earlier to N$48.6 billion, giving an import cover of 3.2 months, or 3.5 months when excluding oil and gas exploration imports.
The decline was caused by several outflows, including the eurobond redemption on 29 October, net rand outflows by commercial banks, government foreign payments and a stronger Namibian dollar against the US dollar.
The eurobond repayment also affected liquidity in the domestic banking sector. Commercial banks’ average cash balances fell to N$5.2 billion in October, down 29.2% from September.
Broad money supply growth slowed to 7.5% in October from 10.3% in September.
This was linked to lower net foreign assets of depository corporations as the central bank helped fund the eurobond settlement. Domestic claims rose to 17.5% as sinking fund deposits were drawn down, increasing net claims on central government.
Private sector credit extension eased to 4.7% in October from 5.9% in September.
Both businesses and households took up less credit, with business repayments notable in mining, manufacturing and fishing.
Household credit growth slowed to 2.8% as demand weakened across all categories. Instalment and leasing credit remained strong at 18.4%, supported by vehicle sales, which grew by 10.7% year-on-year.
Mortgage credit stayed weak, contracting by 0.9% as demand from both households and businesses remained low.
Headline inflation edged up to 3.6% in October from 3.5% in September because of higher transport and housing inflation, while food inflation slowed.
The Ministry of Finance and BoN confirmed the successful redemption of Namibia’s second Eurobond in October. The US$750 million repayment is the largest single debt maturity in the country’s history. Namibia issued its first Eurobond in 2011 for US$500 million at an interest rate of 5.5%. That bond was redeemed in November 2021.
Namibia returned to the international capital markets in 2015 with its second Eurobond of US$750 million at a coupon of 5.25%.
The bond helped the country bridge financing gaps, support the budget, strengthen reserves and stimulate growth during a period of global financial uncertainty.
The funds were used for major developmental projects, including road expansion, energy infrastructure, education, and healthcare.
The government has implemented the Sovereign Debt Management Strategy of 2005 alongside the Namibia Financial Sector Strategy of 2011–2021.
These frameworks recommend covering about 80% of funding needs from the domestic market and 20% from international markets. The emphasis on domestic financing has helped build a deep local market that the government can rely on for resource mobilisation.
To close the remaining US$306 million gap linked to the Eurobond, the government issued a request for proposals to local commercial banks. Standard Bank provided N$3 billion, FNB provided N$1.5 billion, and Bank Windhoek, in partnership with ABSA, also provided N$1.5 billion.
Caption
Namibia’s international reserves dropped sharply at the end of October.
- Photo: Contributed
