CHAMWE KAIRA
The Bank of Namibia’s stock of international reserves increased by 3.7% month-on-month to N$57.6 billion at the end of June.
The monthly increase in international reserves was on the back of higher net commercial bank inflows, supported by Customer Foreign Currency (CFC) placements, as well as revaluation gains due to price changes in the market. The foreign reserves translated into 3.8 months of import cover, exceeding the international benchmark of three months.
“This level of reserves is considered adequate to support the Namibia Dollar and the South African Rand currency peg. Notably, the import cover excluding imports of oil exploration and appraisal activities stood at 4.6 months at the end of June 2024, relative to 4.4 months recorded at the end of May,” the central bank said.
The industry liquidity declined to N$8 billion in June, from N$8.6 billion in May. The decrease in the liquidity level was mainly attributed to corporate tax payments. Despite this, the industry’s overall liquidity remained elevated supported by high proceeds from diamond sales.
The growth in other loans and advances decreased to 8.4 percent at the end of June, compared to 10.3% registered at the end of May. The decrease in growth was driven by repayments by corporates in the fishing sector.
The banking industry’s liquidity declined to N$8 billion in June, from N$8.6 billion in May. The decrease in the liquidity level was mainly attributed to corporate tax payments. Despite this, the industry’s overall liquidity remained elevated supported by high proceeds from diamond sales.
The central bank said the annual growth in broad money supply (M2) increased at the end of June. M2 growth increased to 9.2%, relative to 8.4% growth posted at the end of the preceding month.
“The increase in M2 growth emanated from an increase in Net Foreign Assets of the Depository Corporations. The increase was further evident in increased growth for currency outside depository corporations, and longer-dated deposits. Contrary, growth in domestic claims decreased at the end of the review period, recording a growth rate of 2%, relative to a growth rate of 2.6 percent at the end of May,”
The annual growth in instalment sales and leasing credit moderated, but still remained robust and in double digits in June.
“Although slightly decreasing to 15% in June, relative to 15.1% in May 2024, growth in instalment and leasing credit remained high, supported by improved activity in the tourism sector,” the central bank said.
