CHAMWE KAIRA
The country’s stock of international reserves increased by 2.9% month-on-month to N$58 billion at the end of July, supported mainly by Southern African Customs Union (SACU) receipts and strong foreign-currency placements by commercial banks, according to the Bank of Namibia’s Money and Banking Statistics for July.
The increase was also supported by the depreciation of the domestic currency and additional monetisation of gold during the month.
The level of reserves translated into an estimated import cover of 3.6 months, increasing to four months when oil and gas exploration and appraisal-related imports are excluded.
The reserves were estimated at 10.1 times currency in circulation, a level considered adequate to support Namibia’s currency peg to the South African rand while meeting the country’s short-term international obligations.
Meanwhile, liquidity in Namibia’s banking sector declined sharply during July. Cash balances held by commercial banks fell by 31.5% to N$6.7 billion in July, from an average of N$9.7 billion in June.
The decline was mainly attributed to substantial investment-related outflows during the month.
Despite the decrease, banking-sector cash balances remained elevated, with commercial banks’ liquid assets comfortably above prudential requirements and the sector considered well positioned to meet short-term obligations.
Private-sector credit extension also lost momentum during the month. The total domestic private-sector loan balance reached N$125.1 billion at the end of July, representing annual growth of 4.2%, down from 4.5% in June.
In real terms, private-sector credit contracted by 0.2%, indicating that credit growth remained below consumer price inflation.
The moderation was partly attributed to subdued loan uptake and net repayments, particularly by businesses.
Corporate credit growth slowed to 3.7% in July from 4.5% in June. The decline reflected lower uptake and net repayments across overdrafts, mortgages, instalment and leasing credit, as well as other loans and advances.
Repayments by companies in the manufacturing, fishing and agriculture sectors also weighed on overdraft lending.
Annual overdraft credit growth slowed to 2.3% in July from 4.1% in June. Household overdraft growth declined to 8.9% from 12.5%, reflecting lower uptake.
Household credit growth, however, edged higher to 4.6% in July from 4.5% in June.
The increase was driven by stronger growth in mortgage credit and instalment sale and leasing credit.
Household mortgage credit grew by 2.4%, its highest level since December 2023. Broad money supply growth also weakened during the month.
Annual growth in M2 declined to 9.1% in July from 11.5% in June.
The slower growth was attributed mainly to a deeper contraction in net foreign assets, which fell by 4.8% in July compared with a 2.6% contraction in June.
This marked the 10th consecutive month of negative annual growth in net foreign assets since October 2025.
Domestic claims growth also slowed, falling to 14.4% from 17.2%, largely due to slower growth in net claims on central government.
Growth in transferable deposits declined to 11% in July from 12.9% in June, mainly because of lower deposit placements by businesses and other financial corporations.
Growth in other deposits, including long-term deposits, fell to 6.9% from 10.3%, reflecting lower long-term deposits by households and other financial corporations.
In contrast, currency outside depository corporations increased by 8.7% in July, up from 3.5% in June.
