Foreign reserves dip slightly in August
The level of international reserves eased to N$32.2 billion at the end of August from an upwardly revised N$32.5 billion recorded at the end of July, the Bank of Namibia reported.
The Bank said that the slightly lower level of reserves is due to increased government payments made during the period under review.
However, PSG Konsult Namibia said that foreign reserve levels remain sufficient despite August’s slight decline, adding that inflows from SACU are expected to be weaker than in recent years due to the slowdown in the South African economy, which shrinks the SACU revenue pool.
“Besides this, the inflows from the National Bank of Angola (BNA) debt repayments ended in June 2018 after the BNA settled its debt and the current account deficit is expected to widen this year, which will put pressure on foreign reserves,” PSG added.
However, on the bright side, PSG stressed that inflows from the African Development Bank loan agreement will continue to boost foreign reserves until 2019.
“In general, the growth in monetary aggregates is well below the levels seen during the economic boom years of 2010-15 and suggests that real GDP growth remains sluggish,” the firm added.