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Namibia's central bank cut its repo rate by 75 basis points to 6.0 percent on Wednesday, citing a subdued inflation environment and downside risks to the local economic recovery.
With the latest cut, the bank has now reduced rates by a cumulative 450 basis points since December 2008 to boost flagging growth, after a global downturn hit demand for exports from its key mining sector.
“The domestic economy continued to record positive growth performance during the third quarter. However, the outlook remains subdued as data continue to point towards the weaker growth prospects,” Governor Ipumbu Shiimi said in a statement.
Shiimi said the recovery in household spending remained weak but should improve slightly over the holidays.
The bank said the economy is likely to have expanded 4.2 percent this year, leaving its forecast unchanged from October.
Data on Wednesday showed inflation ticked up to 3.4 percent year-on-year in November from 3.2 percent. Shiimi said the uptick in inflation was not “a worrying trend” and the outlook had stayed largely the same since the bank's October rate-setting meeting.
“The subdued inflationary environment for the short to medium term further provided space for monetary easing,” he said. - Reuters
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