Namibia's central bank held its repo rate steady at 5.50 percent, but said "persistent global challenges are increasingly presenting downside risks to domestic growth, through falling commodity prices, and growth is expected to remain below the targeted level."
The Bank of Namibia, which has held rates steady this year after cutting by 50 basis points last year, also said inflation is expected to remain within tolerable levels for the rest of the year and international reserves have risen since June and "remain adequate to protect the fixed currency arrangement."
The central bank said it decided to maintain its rates to "support the domestic economy, and mitigate the impact of falling commodity prices and suppressed demand for Namibian export products," including copper and uranium.
Namibia's economy is forecast to expand by 4.7 percent in 2013, down from 5.0 percent in 2012 though growth in the first half is expected to be in line with first half of 2012.
In April the central bank had forecast growth this year of 4.4 percent.
Output from the primary industries are estimated to slow to 2.5 percent growth this year due to drought affecting agriculture while uncertainties surrounding diamond and uranium production is exerting a drag.
Namibia's inflation rate eased to 5.8 percent in July from 6.2 percent in June due to slower rise in food prices, electricity, gas and other fuels.
"Inflation is expected to remain stable, around current levels, for the remainder of the year," the central bank said, adding the "lagged effect of Namibia dollar depreciation against major currencies continues to constitute a risk to the inflation outlook."
Namibia's dollar declined slowly in the first few months of this year but the depreciation picked up speed in May, along with the currencies of other emerging and less developed countries as investors started to shift their portfolios toward advanced economies that appeared to be improving.
Against the U.S. dollar, the Namibian dollar has depreciated 17.3 percent this year, quoted at 10.23 today compared with 8.46 at the start of the year.
Namibia's foreign exchange reserves rose to N$18.1 billion at the end of July, the bank said.