Banking liquidity declined significantly during February
The overall liquidity position of commercial banks decreased to N$1.85 billion at the end of February 2018, the Bank of Namibia stated.
This decrease comes from a higher level of N$1.91 billion recorded in liquidity in in the preceding month, where it also decreased by N$1.2 billion (to reach N$1.91) from December 2017.
According to the bank, the February decrease culminated from cross border trade-related outflows and corporate tax payments during the review period.
Furthermore, the Central Bank reported that growth in total credit extended to businesses rose at the end of February 2018. The annual growth in credit extended to businesses rose to 3.7% at the end of February 2018 compared to 3.2% at the end of January 2018.
“The increase in credit extended to businesses was mainly driven by an increase in mortgage credit supported by an increase in commercial loans extended to large corporations during the month under review,” the Central Bank noted.
Meanwhile, overall inflation declined during February 2018. Namibia’s annual inflation rate decelerated to 3.5% in February 2018 compared to 3.6% in January 2017.
This slow down was due to a significant reduction in the category food and non-alcoholic beverages supported by smaller declines in housing, water and electricity, furnishings, transport, and household equipment.
Additionally, the stock of international reserves fell by N$1.5 billion to reach N$26.8 billion during February 2018. The decline in the level of reserves was due to net commercial bank purchases of foreign currency, net government purchases and maturities of foreign currency investments held with the central bank during the period under review.