CHAMWE KAIRA
The stock of international reserves rose by 5.5% to N$60.8 billion at the end of July, the Bank of Namibia announced.
The increase in international reserves was on the back of higher SACU receipts, as well as Customer Foreign Currency (CFC) placements.
This level of foreign reserves translated into 4.1 months of import cover, exceeding the international benchmark of 3 months. Notably, the import cover, excluding imports of oil exploration and appraisal activities, stood at 4.9 months at the end of July, relative to 4.6 months recorded at the end of June.
Furthermore, the banking industry liquidity position decreased in July. The overall liquidity position of the banking industry decreased to N$6.4 billion in July, from N$8 billion recorded in June. The decrease was mainly ascribed to lower inflows, fueled by lower diamond sales during the period under review, the central bank said.
In additional, the central bank further disclosed that the annual growth in the stock of broad money supply (M2) decreased at the end of July to 8.1%, lower than 9.2% growth recorded at the end of June.
“The decline emanated from a decrease in the growth of Net Foreign Assets of the Depository Corporations, specifically that of the Other Depository Corporations. This was mainly evident in the decrease in claims on non-residents, reflected in both short and longer dated deposits. Contrary, growth in domestic claims increased slightly at the end of the review period, recording a growth rate of 2.3%, relative to 2% registered at the end of the preceding month, mainly due to an observed increase in claims on other sectors.”
Additionally, the central bank pointed out that annual growth in credit extended to the private sector (PSCE) remained unchanged and stood at 1.8% at the end of July, similar to the rate recorded at the end June.
“Despite a modest uptick in the growth for business credit during the review period, this was offset by a decrease in the growth for credit to the household sector, resulting in stagnant growth for overall PSCE.”
Lastly, it was disclosed that the annual growth in business credit increased slightly at the end of July. The growth in credit extended to businesses increased moderately to 0.8% at the end of July, slightly higher than the 0.5% recorded at the end of June.
“Business credit continues to be sustained by the growth in instalment sales and leasing, particularly from the car rental industry, benefiting from improved tourism activity.”
