The Bank of Namibia left its benchmark repo rate steady at 6.5% in December 2025, following a 25 bps cut in October, aiming to safeguard the Namibian Dollar’s peg to the South African Rand while supporting domestic growth. Policymakers highlighted ongoing global policy uncertainty and potential risks to the domestic economy. While welcoming South Africa’s lower inflation target as supportive of Namibian price stability, the central bank stressed that SA’s formal 3% target requires vigilance in managing domestic inflation to protect the exchange rate peg. Domestically, the central bank noted that despite slower economic activity, the outlook remains positive, with inflation well-contained and growth expected to recover over the medium term. Real GDP growth is now projected at 3% in 2025, 0.5 points below the previous forecast, before accelerating to 3.8% in 2026 and 4.3% in 2027. The 2025 inflation forecast remains at 3.6%, while the 2026 projection has been revised down to 3.8%.
