Chamwe Kaira
The Bank of Namibia’s stock of international reserves declined in September by 3.4 percent month on month to N$53.8 billion compared to N$55.6 billion at the end of August.
“The decline is attributable to commercial bank outflows, as well as government payments. The foreign reserves translated into 5.6 months of import cover, remaining above the international benchmark and adequate to support the currency peg between the Namibia Dollar and the South African Rand,” the central bank said.
The annual growth in M2 declined to 7.9 percent at the end of September relative to a growth of 9.6 percent in August. The decline in M2 growth stemmed from a decrease in both domestic claims and net foreign assets of the depository corporations.
Growth in the Private sector credit (PSCE) slowed to 1.6 percent, year-on-year in September, relative to the 2.3 percent at the end of August due to a lower demand coupled with net repayments of credit by businesses, specifically corporates in the services, wholesale and retail trade, commercial real estate, mining, manufacturing and fishing sectors.
Credit extended to businesses contracted further by 2.1 percent in September, relative to a contraction of two percent in August. Growth in credit advanced to businesses has been sluggish and remained in negative territory for six months consecutively.
The annual growth in credit extended to households slowed to 4.3 percent at the end of September from 5.4 percent reported at the end of August. The decline in the growth of credit extended to households stemmed from a lower demand in the categories overdraft credit as well as other loans and advances during the period under review.
The annual growth in overdraft credit contracted to 0.4 percent in September from a growth of 0.3 percent at the end of August due to lower demand and repayments by the corporate sector specifically corporates in the mining, manufacturing as well as the wholesale and retail trade sectors during the period under review.
On an annual basis, growth in other loans and advances contracted to 0.5 percent in September relative to a growth rate of 2.1 percent recorded in August.
The annual growth in instalment sales and leasing credit maintained its upward trajectory in September to end at 11.6 percent, higher than the 10.6 percent recorded in August. The rise emanated from an increase in demand for new vehicles from both the business and household sectors.
Mortgage credit growth stood at 1.2 percent at the end of September and was sustained by the household sector amidst higher repayments from the corporate sector over the period under review.
The overall liquidity position of the banking industry decreased at the end of September with the industry’s cash balances averaged N$7.3 billion in September, lower than N$8.8 billion reported in August. This depicts a month-on-month decrease of N$1.5 billion attributed to a lower government spending, lower diamond sales and more cash being placed in the BoN Bill.
