N$6.1bn raised for Eurobond
Loan obligation will be redeemed
The Bank of Namibia is confident that government will not default on its Eurobond, due in November next year.
Bank of Namibia (BoN) governor Johannes !Gawaxab announced that the government has raised N$6.1 billion (US$338 million) to meet its Eurobond obligation due in November 2025, and aims to secure additional funds by the deadline.
This is against a targeted US$500 million (about N$9 billion) government has intended to set aside once the Eurobond should be redeemed. Finance minister Ipumbu Shiimi had previously announced that the government would honour the Eurobond to the tune of US$500 million, while the remainder would be converted to local debt.
“There is a sinking fund. We hope [to pay] US$500 million of the US$750 million we owe. We are probably going to have provision in the sinking fund... So far, we have US$338 million, so I am not concerned,” !Gawaxab said during the announcement of the monetary policy.
He added that the government will likely have raised more than the targeted US$500 million to honour the Eurobond, going beyond its stated objective. “When we get to next year, we will probably have more than US$500 million. And the rest we can decide what we do [with it] at that stage,” he said.
Government in 2015 accessed its second Eurobond, following the successful first Eurobond raised in 2011 to the tune of US$500 million under the Hifikepunye Pohamba administration.
Meanwhile, !Gawaxab said the central bank opted to reduce the repo rate by 25 basis points, to bring it to 7.5%.
“Domestic inflationary pressures have continued to ease year-to-date. On average, inflation slowed to 4.8% during the first seven months of 2024, from 6.2% recorded during the same period in 2023. The disinflation continued to be primarily driven by relatively lower average food inflation. Since the last monetary policy committee meeting, inflation eased from 4.9% in May to 4.6% in both June and July,” he said.
This is against a targeted US$500 million (about N$9 billion) government has intended to set aside once the Eurobond should be redeemed. Finance minister Ipumbu Shiimi had previously announced that the government would honour the Eurobond to the tune of US$500 million, while the remainder would be converted to local debt.
“There is a sinking fund. We hope [to pay] US$500 million of the US$750 million we owe. We are probably going to have provision in the sinking fund... So far, we have US$338 million, so I am not concerned,” !Gawaxab said during the announcement of the monetary policy.
He added that the government will likely have raised more than the targeted US$500 million to honour the Eurobond, going beyond its stated objective. “When we get to next year, we will probably have more than US$500 million. And the rest we can decide what we do [with it] at that stage,” he said.
Government in 2015 accessed its second Eurobond, following the successful first Eurobond raised in 2011 to the tune of US$500 million under the Hifikepunye Pohamba administration.
Meanwhile, !Gawaxab said the central bank opted to reduce the repo rate by 25 basis points, to bring it to 7.5%.
“Domestic inflationary pressures have continued to ease year-to-date. On average, inflation slowed to 4.8% during the first seven months of 2024, from 6.2% recorded during the same period in 2023. The disinflation continued to be primarily driven by relatively lower average food inflation. Since the last monetary policy committee meeting, inflation eased from 4.9% in May to 4.6% in both June and July,” he said.
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