Bloomberg News

Namibia Central Bank Keeps Key Rate at 6% to Boost Growth

February 22, 2012

(Updates with comment by governor in third paragraph.)

Feb. 22 (Bloomberg) -- Namibia’s central bank kept its benchmark interest rate unchanged for a seventh consecutive meeting to help boost economic growth.

The repo rate was left at 6 percent, Bank of Namibia Governor Ipumbu Shiimi told reporters today in the capital, Windhoek. The bank has held the rate unchanged since December 2010.

“The monetary policy committee is of the view that a tightening of the monetary policy stance at this stage might be premature and thus detrimental to growth prospects,” he said.

Economic growth in Namibia, the world’s biggest miner of offshore diamonds and the fourth-largest producer of uranium, probably slowed to 3.8 percent last year from 6.6 percent in 2010, Shiimi said.

“The slowed growth reflects weaknesses in the mining sector, which incurred production losses due to prolonged industrial actions, flooding at the mines and logistical constraints,” he said. Other industries including construction, communications and transport recorded positive growth, he said.

The southern African nation’s inflation rate fell to 6.6 percent in January from a 2 ½-year high of 7.2 percent a month earlier, the statistics office said on Feb. 14. Inflation may accelerate this year, though it will remain below 10 percent, Shiimi said.

The rates 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.

--Editors: Gordon Bell, Paul Richardson

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

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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