By Nyasha Nyaungwa
WINDHOEK (Reuters) -Namibia’s central bank on Wednesday raised its main lending rate by 50 basis points to 4.75%, citing persistent inflationary pressures.
Inflation is projected to average around 5.9% for the year, from the 6.0% forecast at the last Monetary Policy Committee meeting, central bank governor Johannes !Gawaxab said.
“Although overall inflation remains within a reasonable range, inflation risk … persists and mainly lingers around supply disruptions which may continue to put pressure on food and oil prices,” he said.
Annual inflation in May stood at 5.4%, down slightly from 5.6% in April, with transport, food and non-alcoholic beverages being the major contributors, data from the statistics agency showed earlier in the day.
The Bank of Namibia said it expected the domestic economy to grow around 3% in 2022.
“We think that it should probably be around 3% rather than the firm 3% that we gave earlier,” !Gawaxab told a news conference.
The rate hike was a unanimous decision, which the central bank said was also motivated by the need to safeguard the 1:1 link between the Namibian dollar and South Africa’s rand.
The South African Reserve Bank last month raised its key rate by 50 basis points to 4.75%.
(Reporting by Nyasha Nyaungwa; Writing by Bhargav Acharya; Editing by Alexander Winning)
