CHAMWE KAIRA
The Bank of Namibia’s stock of international reserves decreased at the end of August by 2.5% to N$59.3 billion, the central bank announced.
The decrease in international reserves was primarily caused by customer foreign currency (CFC) withdrawals.
This level of foreign reserves translated into four months of import coverage, exceeding the international benchmark of three months.
Notably, the import cover, excluding imports of oil exploration and appraisal activities, stood at 4.8 months at the end of August relative to 4.9 months recorded at the end of July.
At the end of August, the annual growth in private sector credit (PSCE) increased moderately to 2.1 percent, slightly higher than the 1.8% posted at the end of July 2024.
The growth in PSCE emanated from an observed uptick in credit extended to the corporate sector, whereas growth in household credit remained subdued, decreasing for a second consecutive month, the central bank said.
Annual growth in the stock of broad money supply (M2) slowed at the end of August and stood at 7.8%, lower than 8.1% growth recorded at the end of July.
The central bank said the decline was mainly due to a contraction in the depository corporations’ net foreign assets (NFA).
The net NFA recorded a negative growth rate of 0.3%, lower than the 5% growth recorded at the end of July, primarily due to a decline in the NFA of the Other Depository Corporations.
“Similarly, growth in domestic claims decreased at the end of August, recording 0.7% growth, lower than 2.3% at the end of July, contributing to the slowdown registered in the growth in M2,” the central bank said.
Annual growth in business credit increased at the end of August to 2.1% at the end of July, higher than the 0.8% recorded at the end of July.
The increase was mainly observed in other loans and advances by corporates in the mining sector.
Additionally, growth in installment sales and leasing remained robust, supporting overall growth in business credit.
Growth in household credit moderated at the end of August and stood at 2.1%, lower than 2.5% at the end of July.
“This marks the lowest growth recorded this year and was mainly observed in mortgage credit, the largest credit category,” the bank said.
The bank reported that the growth in overdraft credit remained negative at the end of August, with overall overdraft lending contracting by 13.2%. This contraction continued in negative territory for the seventh consecutive month as corporations continued to make repayments.
In August 2024, the overall liquidity position of the banking industry experienced a decrease to N$5.7 billion, lower than N$6.4 billion recorded in July, mainly due to significant cross-border payments as well as lower government spending relative to the preceding month.
