Namibia's central bank kept its policy rate unchanged on Wednesday in its first meeting under new Governor Ebson Uanguta, saying it wanted to ensure stability in capital flows and preserve the country's currency peg.

The bank maintained its repo rate at 6.50% for the second time in a row.

The Southern African country's inflation is well-contained, coming in at 2.9% in January, its lowest level since February 2021.

"This policy stance is deemed appropriate for safeguarding the one-to-one link between the Namibia dollar and the South African rand, while remaining supportive of domestic economic activity," Uanguta, who has been appointed for a five-year term, told a press conference.

The economies of neighbours Namibia and South Africa are closely intertwined, as are their monetary policy stances.

South Africa's repo rate sits at 6.75% after its central bank kept the rate unchanged at its January meeting.

The Bank of Namibia said it was currently revising its economic growth forecast for this year and that it was likely to be lowered from its previous 3.8% projection, given weakness in the diamond sector and the effects of a foot-and-mouth outbreak on agriculture.

It has trimmed its inflation forecast for this year to 3.5% from the 3.8% estimate given in December.