The Bank's system of accommodation
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7-day Repo
The 7-day refinancing facility, based on repurchase agreements (repos), is the main system of providing accommodation to the banking institutions. The objective of the Bank’s seven-day repo facility to banking institutions is to ensure that the refinancing operation of the Bank of Namibia is administered timely, effectively and within agreed service levels. Interest rate charged on this facility is the prevailing Repo rate. The Bank of Namibia, as part of its monetary operations, conducts weekly fixed-rate main repurchase auctions with one-week maturities.
Overnight Repo
A penalty, above the ruling Repo rate, that is reviewed by the Bank periodically is charged on the overnight repo. The Bank reserves the right to change the penalty if borrowing under this facility suggests permanent lending to banking institutions.
Intraday Lending
The Bank offers intraday loans to the banks, made available by the under the NISS system. Intraday settlement means that settlement would take place on the same day the transaction was entered into. There is no interest charged on the intraday facility.
Eligible Securities
Following below is the list of eligible facilities which the banks must pledge before allowed accommodation or funding from the Bank of Namibia:
Category 1 securities consist of:
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Government of the Republic of Namibia Treasury Bills;
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Government of the Republic of Namibia Internal Registered Stock;
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Bank of Namibia Bill;
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Securities fully guaranteed by the Government of the Republic of Namibia;
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Separate Trading of Registered Interest and Principal of Securities (STRIPS) stripped by the Government
Category 2 securities consist of:
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Investment graded debt papers of State Owned Enterprises, e.g. NamPower bonds;
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Separate Trading of Registered Interest and Principal of Securities (STRIPS) not stripped by the Government Settlement
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Provided that sufficient collateral has been secured, the Bank will transfer funds within one hour thereafter via NISS, and the banking institutions will do likewise, in case of a reverse repo.