Nam to keep dollar-rand peg

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Windhoek – Bank of Namibia (BoN) Governor Johannes !Gawaxab has reiterated  Windhoek’s to  the Common Monitory Area (CMA) despite a slump in revenue flows as well as economic challenges brought about by the COVID-19 pandemic.

Answering questions on the occasion of his 100th day in office this past week, the central bank chief told The Southern Times Business that the recovery from the novel coronavirus-induced economic slide could be protracted for CMA countries, but Namibia had no intention of leaving the union.

The CMA groups Botswana, Eswatini, Namibia and South Africa in a revenue – the Southern Africa Customs Union – and revenue pool. It is on this basis that the Namibian dollar and South African rand are pegged at par.

!Gawaxab said, “There are benefits that we accrue from the CMA. Look at the inflation rate that we have in Namibia; it has remained relatively low. We can argue on whether the CMA is beneficial to Namibia or not, but as the central bank we believe that our membership of the CMA is serving us very well and we need to maintain it.

“It is important to constantly debate about our participation in the CMA and also weigh the options all the tie but as it stands there is no reason for us to consider disengaging because the benefits we accrue as a country from our one on one peg with the South African rand outweighs the challenges.”

He said while Namibia was going through economic challneges, like much of the rest of the world, his 100-day plan had laid the foundation for longer-tern success.

“In view of this, (I) had extensive stakeholder engagements, aimed at building a bridge between the bank and its constituencies, collecting intelligence relating to activities of the monetary policy committee, the financial stability mandate of the bank and operations of the economy in general.

“In this regard, (I) met with the top leadership of the Namibia Chamber of Commerce and Industry (NCCI), Chamber of Mines, the National Union of Namibian Workers (NUNW), managing directors of diamond mines and diamond sales, marketing and trading companies. As the leader of a regulating entity, the Governor also visited all systemically important financial institutions, not only limited to commercial banks,” he said.

The BoN Governor said going forward he was focused on modernising the central bank’s operations and implementing 21st-century solutions to economic challenges in as much as they related to monetary issues.

“The possibility of helping to reform the Namibian financial system to be ready for the 21st century and modernising the operations of the bank adds to the challenge and to my desire to leave the bank and the country in a better position than the one we are in now,” said !Gawaxab.

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