On June 17, 2026, the Bank of Namibia raised its benchmark repo rate by 25 basis points to 6.75%, marking its first interest rate increase in three years as it seeks to contain mounting inflationary pressures driven by higher global oil prices.
The Central bank said inflation risks remain elevated despite the peace agreement between the United States and Iran, prompting a moderate tightening of monetary policy. Annual inflation accelerated to 4.1% in May 2026, up from 3.1% in April, even after the government reduced fuel levies to cushion consumers from rising energy costs linked to the US-Israeli conflict with Iran.
Reflecting the worsening outlook, the Bank of Namibia revised its average inflation forecast for 2026 to 4.0%, up from the 3.7% projected at its April policy meeting. The bank noted that while domestic economic activity and credit growth remain subdued, tighter monetary policy is necessary to manage inflationary pressures.
Namibia’s monetary policy remains closely aligned with that of neighbouring South Africa, whose central bank also increased its key lending rate by 25 basis points last month.