Country Report Namibia May 2011

Outlook for 2011-12: Monetary policy

The BoN held Namibia's repurchase (repo) rate at 6% at its February meeting, maintaining the 50-basis-point differential with South Africa's repo rate. As sharply higher crude oil prices will increase inflationary pressures, no further rate cuts are expected, and the South African Reserve Bank (SARB) may begin to tighten monetary policy in the second half of 2011 or in 2012 as inflation in South Africa approaches the bank's 6% ceiling. The SARB's interest-rate changes are likely to be matched by the BoN.

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