Foreign reserves boosted by Angolan settlement, seigniorage and weaker Rand
The level of international reserves increased to N$29.6 billion at the end of June from N$28.2 billion at the end of the previous month, according to the Bank of Namibia’s latest Money and Bank Statistics report.
The rise during the month is mainly attributed to payments received from the National Bank of Angola, interest received on investments, rand seigniorage and exchange rate fluctuations. In July, it was announced that the National Bank of Angola had fully settled its US$390 million debt with the Namibian central bank after the final installment of US$51.1 million was paid on 22 June.
Furthermore, PSG Konsult said a sufficient foreign currency buffer is required to ensure Namibia can meet its international financial obligations.
“Foreign reserve stocks will come under pressure this year due to a higher import bill and lower Southern African Customs Union (SACU) revenue. Although the Angolan repayments have now ended, foreign reserves will receive some temporary respite from more African Development Bank loan inflows over the course of 2018 and 2019,” PSG explained.
Regarding the exchange rate, the Namibian dollar depreciated to N$13.70/$ at the end of June from N$12.50/$ at the end of the previous month, which boosted the local currency value of US dollar reserves.