Namibia's central bank held its benchmark repo rate steady at 5.50 percent, repeating that interest rates need to remain low to "support the economy and mitigate, as far as possible, the impact of endured slow growth in many our trading partners."
The Bank of Namibia, which has held rates steady this year after cutting by 50 basis points last year, said the country's economy was resilient and growth this year is forecast at 4.4 percent, down from an estimated 5.0 percent in 2012.
"Despite ongoing uncertainties in the global economy, domestic growth continues to be relatively strong, while inflationary pressures are low," the Bank of Namibia said, adding developments were largely in line with its assessment from February.
So far this year, growth has been driven by higher output from mining, agriculture, manufacturing and construction, while wholesale and retail has contributed less.
A recent decline in international commodity prices is of a concern as this impacts the mining industry, the bank said, adding that the government budget will support domestic production and consumption through relatively high levels of expenditure and tax relief.
Namibia's inflation rate rose to a "manageable" 6.3 percent in March from 6.21 in February, with no changes anticipated in the short to medium-term, the bank said.
Credit growth also remains rebust, with credit to the business sector the main driver while credit to individuals rose less. The fiscal position of the government has improved, allowing for the build-up of a cash balances with the central bank.
Foreign reserves are still enough to cover three months of imports and the currency peg, the bank said.
At its previous meeting in February, the Bank of Namibia also forecast that the economy would grow by 4.4 percent this year and it was keeping its policy rate low to mitigate the impact of slow growth in many trading partners.