Foreign reserves increase to N$54.9 billion

The stock of international reserves increased by 8.4% month to month to N$54.9 billion at the end of December, relative to N$50.6 billion in November, the Bank of Namibia revealed.

The central bank said the increase was attributable to higher commercial bank inflows as a result diamond sales and customer foreign currency placements (CFC’s). The foreign reserves translated into 4.6 months of import cover.

Growth in M2 (money supply) rose to 10.7% at the end of December relative to a growth of 10.3% in November. The rise in M2 growth stemmed from an increase in domestic claims, during the period under review.

Private Sector Credit Extension (PSCE) moderated at the end of December. The annual growth in PSCE edged lower at 1.9%, year-on-year in December, relative to 2.2% at the end of November.

The slight decrease in the growth of PSCE emanated from a lower demand and repayments by the corporate sector during the review period.

Growth in credit extended to businesses slowed to 0.4% in December, relative to 0.7% recorded in November, largely owing to lower demand and repayments by corporates in mining, services, wholesale and retail trade and agriculture sectors.

The annual growth in credit extended to households slowed to 3% at the end of December, from 3.2% reported in November stemming from lower demand in other loans and advances during the period under review.

On an annual basis growth in overdraft credit increased to 2.3% in December from 0.1% at the end of November due to higher demand by the household sector.

Growth in mortgage credit stood at 0.9% at the end of December, lower than the growth of 1.7% recorded in November due to the lower growth in mortgage credit mainly emanated from net repayments by the corporate sector.

The overall liquidity position of the banking industry increased at the end of December with the industry’s cash balances rising to N$7.7 billion in December from N$5.9 billion recorded in November 2023.

“This depicts a month-on-month increase of N$1.7 billion attributed to diamond sales as well as corporate tax payments to the state during the review period,” the central bank said.

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