Bloomberg News

Namibia Keeps Benchmark Interest Rate at 6% to Boost Growth

October 26, 2011

(Updates with comments from governor in third paragraph.)

Oct. 26 (Bloomberg) -- Namibia’s central bank left its benchmark interest rate unchanged for a fifth consecutive meeting to support the economy’s recovery while inflation slowed.

The repo rate was kept at 6 percent, Bank of Namibia Governor Ipumbu Shiimi told reporters today in the capital, Windhoek. The bank has held the rate unchanged this year after reducing it at the last two meetings of 2010 to boost growth.

“Benign and low” inflation gives the bank an opportunity to keep supporting economic growth amid a weak and “uncertain” global economy, Shiimi said.

Inflation in Namibia, the world’s biggest miner of offshore diamonds and the fourth-largest producer of uranium, slowed to 5.3 percent in September from 5.4 percent a month earlier, the statistics office said on Oct. 11. The economy will probably expand less than an initial forecast of 4.1 percent for 2011, according to the central bank.

The rate decision is in line with the central bank of neighboring South Africa, which kept its benchmark rate at 5.5 percent last month. Namibia’s currency is pegged to the South African rand and the central bank generally follows monetary policy set by the South African Reserve Bank.

Namibia will sell its planned foreign bond when markets are “calm,” Shiimi said.

The southern African nation plans to sell as much as $500 million of bonds abroad after Moody’s rated its debt Baa3, the lowest investment-grade rating, according to a central bank official.

--Editors: Gordon Bell, Nasreen Seria

To contact the reporter on this story: Chamwe Kaira in Windhoek at ckaira@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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