“The monetary policy committee has decided to leave the repo rate at six percent to support domestic economic activities,” BoN governor Ipumbu Shiimi told reporters.
“The bank remains concerned that growth in household credit remains high and continues to largely finance unproductive imported luxury goods. This puts pressure on international reserves.”
Shiimi said Namibia’s international reserves were covering eight weeks, while 10 to 12 weeks would be desirable.
Apart from international reserves in South African rand, US dollars and Euros, the BoN recently started to build international reserves in Chinese Yuan (Renminbi).
“Namibia trades with China and has received several loans from China. We saw it fit to add Yuan to our international reserves, which make up roughly ten percent of foreign reserves,” Shiimi added.
He did not disclose amounts held in foreign reserves to date, but according to the bank’s annual report for the period ending December 2013, foreign reserves totalled ND5.7 billion (that month).
The bank has raised its repo rate twice this year by 0.25 basis points each.
The BoN governor on Friday said that Namibia’s economic growth for this year would come to 5.3 percent, largely driven by construction, wholesale and retail trade, manufacturing and diamond mining.
“Data available for the first ten months until October show a nine percent increase in onshore and offshore diamond production with 1.6 million carats produced by the end of October,” Shiimi said.
Namibia’s zinc and uranium industries “performed poorly” this year, he said.
Namibia’s inflation rate which has been hovering around six percent for the past few months slowed down to five percent at the end of October.
The BoN expects a GDP growth of 5.6 percent for Namibia in 2015.