Namibia's central bank maintained its benchmark repurchase rate at 7.0 percent, saying this rate "remains appropriate to support growth, while maintaining the one-to-one link between the Namibian Dollar and the South African rand."
The Bank of Namibia, which has kept its rate steady since raising it by 25 basis points 12 months ago, added domestic growth slowed in 2016 from 2015 and early indications show this weakness has continued in the first two months of this year due to "bleak performance in the mining sector, particularly diamond production."
Manufacturing output and wholesale and retail trade, which had been resilient in the past, also fell while private and government construction works contracted. In contrast, cargo volumes in transport and value addition in communications had risen, the central bank said.
Namibia's Gross Domestic Product shrank by 1.7 percent in the fourth quarter from the third for an annual decline of 3.1 percent after falling by 0.8 percent in the third quarter.
For the full 2016 year, GDP grew by only 0.2 percent after 6.1 percent growth in 2015.
Inflation decelerated in February to 7.8 percent from 8.2 percent in January but was up from 2016's average of 6.7 percent.
Annual growth in private sector credit slowed to an average of 8.8 percent in the first two months of this year from a peak of 13.7 percent in January 2016 while the stock of international reserves fell to 22.3 billion Namibian dollars as of March 31 from N$22.9 billion on Jan. 31.
Last month the central bank tightened its regulations for the purchase of second and further properties to lower the exposure of bans in response to a sharp rise in property prices in the capital of Windhoek and the tourist town of Swakopmund as demand outstrips supply.
According to the central bank, the real estate sector in Namibia constitutes more than half of the total value of loans and advances.