Liquidity position best since 2014 – growth in private sector credit continues to rise
During the month of June the overall liquidity position averaged a record high of N$4.9 billion since August 2014 as compared to the N$4 billion recorded in May, according to the latest Money and Banking Statistics of the Bank of Namibia.
According to the central bank, the increased liquidity balances resulted from diamond sales proceeds, coupled with companies hoarding liquidity in preparations for the annual corporate tax payments.
The bank also said the annual growth in Private Sector Credit Extension (PSCE) rose to 5.5% at the end of the month under review, increasing by 0.6% compared to the preceding month.
The annual growth in credit extended to businesses stood at 4.2% at the end of June 2018, higher than 2.9%, recorded at the end of May 2018, the bank added
According to the central bank the improved growth was mainly reflected in mortgage loans extended for commercial purposes, which rose by 3.2% to 8.8% at the end of the review period.
On the opposite side of the pendulum, total credit extended to the household sector rose only slightly to 6.4% during June 2018, from a growth of 6.3% recorded at the end of May 2018. This meagre growth in credit extended to the household sector was mainly reflected in increased leasing contracts.
Moreover, the 12-month growth in broad money supply (M2) rose to 7% at the end of June 2018, from a lower level of 3% at the end of the previous month. This expansion in M2 was driven by the robust growth in net foreign assets of the depository corporations coupled with the increase in credit extended to individuals and businesses.