The “equality” arrangement between the Namibia Dollar and the South African Rand is still viable and serves Namibia very well more than 30 years after it was introduced.
This was said by Deputy Governor of Bank of Namibia Mr Ebson Uanguta.
Despite widespread concerns that Namibia’s monetary policy and financial standing is too dependent on South Africa, and that Namibian officials have done too little or nothing at all in creating an independent financial system, the Bank of Namibia says that there is a lot of benefit for Namibia to remain attached to the financial umbilical cord with South Africa.
Deputy Governor Uanguta emphasized that the Bank of Namibia (BoN) continues to assess the arrangement that makes the Namibia Dollar and South African Rand to operate as equal partners.
“And [BoN] has found that [the peg] continues to serve Namibia well from a price stability perspective while reducing transactional costs which ultimately benefit the economy,” Uanguta said.
Uanguta was speaking at an engagement meeting of Bank of Namibia officials with editors of local media outlets recently in Windhoek.
The meeting further provided key updates on the SME Economic Recovery Loan Scheme that was re-launched in February 2023.
To date, over N$280 million has been disbursed to 267 businesses operating in the construction, retail, manufacturing, and oil and gas industries.
The meeting also covered key highlights of both domestic and global economic conditions.
On domestic economic highlights, the Deputy Governor noted that growth in the domestic economy slowed to 3.7 percent during the second quarter of 2023, compared to 8.5 percent recorded in the corresponding quarter of 2022.
Headline inflation rose to an average of 6.0 percent during the first eight months of 2023, compared to the average of 5.6 percent during the corresponding period of 2022. This was mainly on account of increased inflation for Food & non-alcoholic beverages, Housing, Alcohol Beverages, and Tobacco.
The meeting also highlighted efforts to address concerns about home repossessions which have increased in the post-Covid-19 pandemic. The Bank expressed its commitment to working with stakeholders to find viable solutions to address these pressing challenges while maintaining financial stability.
The Bank also acknowledged the various initiatives being undertaken by the Ministry of Justice to reform the legal processes to ensure the protection of the interest of both homeowners and lenders.
In the photo: Deputy Governor of Bank of Namibia Mr Ebson Uanguta.
