But the Bank of Namibia, which has raised its rate twice this year by a total of 50 basis points, said it would continue to closely monitor installment credit as "large amounts of these loans is still used to finance unproductive luxury goods, thus exerting additional pressure on the country's international reserves."
The central bank has often voiced its concern over how households are using installment credit to pay for the import of luxury vehicles, eroding foreign reserves. As of Oct. 19 Namibia's foreign reserves amounted to 13.0 billion Namibian dollars, unchanged from Aug. 18.
In August the central bank had also expressed its worry over installment credit but taken note of a slowdown in 3 and 6-month moving averages.
Today the central bank said installment credit had slowed to growth of 16.4 percent in August from a peak of 23.5 percent in February. In the first half of 2015 installment credit had slowed to an annual increase of 12.8 percent from 14.8 percent in the first half of 2014.
Namibia's inflation rate also slowed in September to 3.28 percent from 3.38 percent in August with the average rate in the first nine months of this year 3.4 percent, below 5.5 percent in the same 2014 period.
The central bank said it expects inflation to remain low for the rest of the year.
The country's economy is also continuing to improve despite the weak mining sector, with demand for credit still strong despite the slowdown in installment credit. Annual growth in Private Sector Credit Extension was over 15 percent in the first eight months of the year, mainly on credit extended to businesses.
In August the central bank forecast growth this year of 5.0 percent, up from 4.5 percent in 2014.
In September the International Monetary Fund forecast growth this year of 4.8 percent and 5.0 percent in 2016, with inflation ending this year at 5.2 percent, compared with 4.6 percent end-2014, and 5.5 percent end-2016.
www.CentralBankNews.info
The central bank has often voiced its concern over how households are using installment credit to pay for the import of luxury vehicles, eroding foreign reserves. As of Oct. 19 Namibia's foreign reserves amounted to 13.0 billion Namibian dollars, unchanged from Aug. 18.
In August the central bank had also expressed its worry over installment credit but taken note of a slowdown in 3 and 6-month moving averages.
Today the central bank said installment credit had slowed to growth of 16.4 percent in August from a peak of 23.5 percent in February. In the first half of 2015 installment credit had slowed to an annual increase of 12.8 percent from 14.8 percent in the first half of 2014.
Namibia's inflation rate also slowed in September to 3.28 percent from 3.38 percent in August with the average rate in the first nine months of this year 3.4 percent, below 5.5 percent in the same 2014 period.
The central bank said it expects inflation to remain low for the rest of the year.
The country's economy is also continuing to improve despite the weak mining sector, with demand for credit still strong despite the slowdown in installment credit. Annual growth in Private Sector Credit Extension was over 15 percent in the first eight months of the year, mainly on credit extended to businesses.
In August the central bank forecast growth this year of 5.0 percent, up from 4.5 percent in 2014.
In September the International Monetary Fund forecast growth this year of 4.8 percent and 5.0 percent in 2016, with inflation ending this year at 5.2 percent, compared with 4.6 percent end-2014, and 5.5 percent end-2016.
www.CentralBankNews.info
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