• Central Bank reduces policy rate by 25 basis points to 6.50%

• Move aims to back growth while maintaining rand peg

• Inflation forecast revised down to 3.6% in 2025 and 4.0% in 2026

The Bank of Namibia has lowered its key interest rate by 25 basis points to 6.50% from 6.75% after its Monetary Policy Committee meeting held on October 13–14, 2025. The decision is intended to support the domestic economy while preserving the peg between the Namibian dollar and the South African rand.

The move comes amid a slowdown in economic activity, although inflation remains contained. Economic activity has weakened. Inflation remains moderate, while growth in private sector credit extension has improved, though it remains relatively low, the bank said. It added that the trade deficit has narrowed and international reserves remain sufficient to sustain the currency peg and meet external obligations.

In September, Namibia’s inflation stood at 3.5% year-on-year, up from 3.2% in August. The Bank has revised its inflation forecast downward to 3.6% for 2025 and 4.0% for 2026, 0.2 percentage point lower than its previous projections.