Windhoek, Namibia – The Bank of Namibia has retained its benchmark policy rate at 6.50 percent at its first monetary policy meeting of 2026, signalling a cautious stance despite moderating inflation and evolving regional trends.
Okay News reports that the decision, announced following the Monetary Policy Committee meeting chaired by new Governor Ebson Uanguta, marks a continuation of the hold position adopted in December. Policymakers are weighing easing domestic price pressures against regional risks and external policy signals, particularly from South Africa.
According to the Namibia Statistics Agency, annual headline inflation slowed to 2.9 percent in January, compared to 3.2 percent in the same period last year. However, core inflation, which excludes volatile components such as food and energy, stood at 3.2 percent, slightly above the headline figure. This divergence suggests that while overall price pressures are easing, underlying inflationary trends have not fully subsided. Therefore, the central bank’s decision reflects a preference to wait for clearer signs that inflation is sustainably anchored before considering any policy easing.
Namibia’s monetary policy framework is closely aligned with South Africa’s due to the one-to-one peg between the Namibian dollar and the South African rand. This long-standing currency arrangement has significant implications for domestic interest rate decisions. The peg requires Namibia to maintain settings broadly aligned with those of the South African Reserve Bank to preserve currency stability. As a result, even when domestic inflation moderates, Namibia must consider external conditions before adjusting its benchmark rate.
Regional developments are reinforcing this cautious tone. Data from Statistics South Africa showed inflation eased to 3.5 percent in January, strengthening market expectations that the South African Reserve Bank could consider a rate cut soon. Meanwhile, the Bank of Uganda recently left its rate unchanged at 9.75 percent, highlighting a broader pattern of central banks opting for stability as they assess disinflation trends. In West Africa, the Central Bank of Nigeria has scheduled its monetary policy meeting for February 23 and 24, having retained its benchmark rate at 27 percent since November 2025.
