Cirrus Chart of the Week (This week's author - Panduleni Shaduka).
Pandu chart of the week

Cirrus Chart of the Week (This week's author - Panduleni Shaduka).

The Bank of Namibia Monetary Policy Committee elected to cut the repo rate from 7.75% to 7.50%, increasing the differential to the South African repo rate to 75 basis points (bps). With high levels of hard currency, moderated inflation, strong demand for local assets and strain on the consumer, the BoN MPC has found room to move ahead of South Africa in cutting central rates.



The Bank of Namibia (BoN) follows a legislative mandate to support economic growth and development by promoting price stability, adequate banking supervision, and reserve management. Since ‘93, Namibia has pegged its currency to the ZAR, a decision influenced by the country’s close ties to South Africa and historical use of the ZAR. The peg provides stability to Namibia’s economy because South Africa is its largest trading partner.



Given the implications (per the ‘impossible trinity’), the fixed exchange rate regime limits BoN’s ability to use monetary policy to address domestic economic issues. This has occasionally led to mismatches between economic performance and interest rate policy – as highlighted in the mid-’10s and in the current period This discrepancy is highlighted between two periods, pre- and post-‘16.



While the Namibian economy has seen somewhat of an economic rebound, the growth has been largely concentrated in small parts of the economy, while the consumer and local businesses continue to struggle, with little relief offered. The state of the Namibian consumer is reflected by increased non-performing loans (unsecured) and risk-mitigation from the banking sector, with limited credit extension growth. This is an affordability issue, the country has seen supply push inflation, elevated interest rates and little wage growth, placing pressure on the Namibian consumer. While the rate cut in isolation will have limited

effects at offering reprieve, it is timely given the civil wage bill adjustment, and income tax amendments that are likely to improve the consumer’s affordability.

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Currency: GBP to NAD 22.91 | EUR to NAD 19.2 | CNY to NAD 2.48 | USD to NAD 17.54 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.27 | EGP to NAD 0.35 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.65 | ZWL to NAD 0.04 | BRL to NAD 3.12 | RUB to NAD 0.18 | INR to NAD 0.21 | USD to DZD 132.67 | USD to AOA 912.95 | USD to BWP 13.31 | USD to EGP 48.51 | USD to KES 128.5 | USD to NGN 1589.69 | USD to ZAR 17.53 | USD to ZMW 26.47 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1828.68 Down -0.58% | Casablanca Stock Exchange (CSE) MASI 14148.99 Up +0.92% | Egyptian Exchange (EGX) 30 Index 31175.43 Up +1.05% | Botswana Stock Exchange (BSE) DCI 9661.12 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 618.75/OZ UP +0.39% | Copper US$ 4.39/lb DOWN -0.0004 | Zinc US$ 3 053.50/T UP 0.65% | Brent Crude Oil US$ 77.92/BBP UP +0.89% | Platinum US$ 958.24/OZ UP +0.81% |