Namibia's central bank wants commercial banks to cut loan interest rates for ordinary people. The Bank of Namibia kept its main rate steady at 6.75 percent but asked lenders to reduce their profit margins. Banks currently charge customers 3.75 percentage points above the central bank rate since 2020. Other countries that share currency agreements with Namibia limit bank margins to just 3.5 percentage points. Governor Johannes Gawaxab said banks must align their rates with regional partners soon.
Namibians pay higher loan costs than people in neighboring countries even though government interest rates stay the same. Commercial banks earned 14.5 billion Namibian dollars during 2024 with most money coming from loan interest payments. Major lenders like Bank Windhoek made 710 million dollars profit during six months last year. Standard Bank reported over 1 billion dollars profit for the full year 2024. FirstRand Namibia also earned 926 million dollars from July through December.
The central bank decision protects Namibia's currency link with South Africa's rand system. South Africa recently lowered its main interest rate to 7.25 percent during May meetings. Most global central banks have reduced borrowing costs this year except Brazil which continues raising rates. Prime lending rates will stay at 10.5 percent unless banks accept lower profit margins before the next policy announcement.
Namibians pay higher loan costs than people in neighboring countries even though government interest rates stay the same. Commercial banks earned 14.5 billion Namibian dollars during 2024 with most money coming from loan interest payments. Major lenders like Bank Windhoek made 710 million dollars profit during six months last year. Standard Bank reported over 1 billion dollars profit for the full year 2024. FirstRand Namibia also earned 926 million dollars from July through December.
The central bank decision protects Namibia's currency link with South Africa's rand system. South Africa recently lowered its main interest rate to 7.25 percent during May meetings. Most global central banks have reduced borrowing costs this year except Brazil which continues raising rates. Prime lending rates will stay at 10.5 percent unless banks accept lower profit margins before the next policy announcement.
