So why should the trend in global trade be a concern for us?

Namibia is a small open economy, with our current economic model deeply integrated with the external markets and rendering us disproportionately vulnerable to external shocks. The longterm, systemic consequences of trade tensions trigger reduced demand for our export products, with supply chain disruptions prolonging delivery of our commodities. To put this into perspective, our monitored indicators reflect a continued moderation in economic growth relative to the previous four years. Despite the pressures, we have witnessed an improved merchandise trade deficit, thanks to a higher growth in export earnings relative to import payments. The resilience of strong non diamond export revenues has cushioned the trade balance. That said, our data points to a potential higher import bill for capital goods in the coming period, particularly for mining, transport and energy signalling business confidence and the potential for stronger productive capacity over the medium term. Further, favourable rainfall conditions are expected to ease food related import pressures. 

This brings me to the core of our monetary policy decisions , which are never taken lightly. Our assessment is a product of carefully reviewing inflation dynamics, growth trends, global economic developments, financial stability risks and prevailing domestic liquidity conditions. The central bank’s objective remains crystal clear: to maintain price stability while supporting sustainable economic growth. Namibia’s overall inflation has broadly maintained its decelerating trend for the past few months, driven predominantly by a decline in food inflation. In the absence of major swings, we are expecting the continued
easing of domestic price pressures in line with the global disinflation trend.

Our decision also considered the need to stay close to our anchor country to avoid disorderly flows. We continue to monitor the impact of the reduction in rates in October 2025 as part of the easing cycle, including the normalisation of the spread between the repo and the prime lending rate which has the potential to ease the cost of borrowing and assist households and businesses. We were mindful of the stock of reserves especially after the Eurobond redemption of October last year. The Committee was encouraged that our reserves continue to be healthy post the redemption and thus continue to safeguard
the peg arrangement and meet the country’s external obligations.

The decision to maintain the repo rate unchanged at 6.50% followed extensive deliberations over a period of two days, weighing carefully the upside and downside risks to the outlook. What particularly stood out for me as Chair was the robustness of the discussions, the professionalism of the technical teams and the constructive debate that led to the decision. As Governor, it is my strong belief that steady, data-driven, and forward-looking policymaking is essential in this ever-evolving
economic landscape. Monetary policy is most effective when it is well understood and aligned with prevailing conditions. As part of our efforts to ensure that our monetary policy framework remains sound and appropriately calibrated to maintaining price stability and supportive of the broader trajectory of our economy, the Committee will undertake a scenario planning session to assess our current monetary policy conduct.