WINDHOEK, Feb 12 (Reuters) – Namibia’s central bank cut its main interest rate for the fourth straight monetary policy meeting, saying its projections showed inflation would remain well-contained and there was room to support the economy.

The Bank of Namibia reduced its repo rate by 25 basis points to 6.75%, after cutting by the same margin at its previous three policy meetings.

Annual inflation in the Southern African country fell to 3.2% in January from 3.4% in December. The central bank said in a statement on Wednesday that inflation was expected to average 4.0% this year.

Other reasons it gave for lowering the repo rate included the relatively high level of domestic real interest rates and adequate foreign reserves.

The bank forecast 2025 economic growth of 4.0%, higher than last year’s growth of 3.5%, but it said risks to the economic outlook had grown given global trade restrictions.

“We need to watch trade wars, … and see what the impact thereof is on the Namibian economy,” said Bank of Namibia Governor Johannes !Gawaxab.

Namibia’s economy is closely tied to that of its neighbour South Africa, and its currency is pegged 1:1 to the rand.

!Gawaxab said relations between South Africa and the United States under President Donald Trump would have a profound impact on Namibia.

Trump last week signed an executive order cutting U.S. financial assistance to South Africa over its land policy and genocide case against Washington’s ally Israel at the International Court of Justice.

South Africa has defended itself, saying the executive order “lacks factual accuracy and fails to recognise South Africa’s profound and painful history of colonialism and apartheid”.

(Reporting by Nyasha Nyaungwa; Writing by Tannur Anders; Editing by Alexander Winning)