No plans to delink from rand, says Geingob

Namibia is ruling out dropping its currency peg with the South African rand “unless something very drastic happens,” given the close trade links to its larger neighbour and the drive by the world’s biggest producer of marine diamonds to recover from a two-year recession.“We have to consider all the options, but after having considered that we still think that backing one-on-one with the rand is the best option,” president Hage Geingob said in an interview with Bloomberg in Cascais, Portugal.Geingob is attending the Horasis Global Meeting, where business leaders interact with key government officials and eminent thought leaders. This year, discussions centre around the theme of “Catalysing the benefits of globalisation”.Geingob’s comments reiterate the stance of the Bank of Namibia (BoN). The BoN in December issued a statement following a report in international media where finance minister Calle Schlettwein was quoted by Bloomberg as saying government in Windhoek is weighing options to amend the currency arrangement or forge a new path for the Namibian dollar. Schlettwein afterwards denied that he said Namibia was considering to break away from the rand.AssessmentIn its statement, the BoN said the peg arrangement remained in the best interest of Namibia. It continues to achieve the primary objective of price stability, through a peg exchange rate regime with the ultimate aim of promoting economic growth and development.The deputy governor of the BoN, Ebson Uanguta, said the bank conducts assessments on the sustainability of the current arrangement from time to time.He added that the assessments that inform its policy advice to government concluded that the benefits from the fixed exchange rate arrangement between the two currencies outweigh the costs.Namibia’s trade structure also shows that about 60% of goods in Namibia are imported from South Africa, and the peg arrangement helps the country to save substantially on transactional costs. – Bloomberg/Nampa

No plans to delink from rand, says Geingob

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No plans to delink from rand, says Geingob

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