Chamwe Kaira
International reserves held by the Bank of Namibia rose slightly to N$51.8 billion at the end of March.
Reserves increased by 0.1% on a monthly basis. The rise was supported by strong inflows of South African rand from commercial banks and customer foreign currency placements.
At this level, reserves provided about 3.2 months of import cover, or 3.6 months when excluding oil and gas exploration imports.
The reserves were about 9.5 times the currency in circulation. This is seen as sufficient to support the Namibian dollar’s peg to the South African rand and meet short-term international obligations.
Money supply growth slowed during the same period. Annual growth in M2 dropped to 7.9% in March from 8.7% in February.
Growth in currency outside banks declined to 3.9% from 7.2% in the previous month.
Demand deposits grew by 4.2%, down from 4.8%, reflecting lower activity by businesses, households and government.
Growth in other deposits eased to 12.6% from 13.6% due to lower long-term deposits by financial institutions, businesses and government.
Net foreign assets continued to decline. The contraction deepened to 17.6% in March from 2.8% in February. This marked the sixth month of negative growth since October 2025.
Credit growth to businesses slowed. Annual growth dropped to 4.4% in March from 7.3% in February. This was linked to repayments on overdrafts and other loans.
Private sector credit extension stood at N$123.3 billion in March, with annual growth of 4.3%, down from 4.7% in February.
Credit to households increased slightly. Annual growth rose to 4.1% from 2.9%, supported by higher demand for mortgages, overdrafts and installment credit.
Growth in other loans and advances slowed to 4.3% from 6.6%, reflecting lower demand and repayments, especially in the manufacturing and financial services sectors.
Caption
The reserves translated to an estimated import cover of 3.2 months in March.
- Photo: Contributed
