Banking liquidity reverses trend, down in October. Private sector credit continues to grow
The Bank of Namibia announced that the liquidity position of commercial banks declined to N$3.4 billion in October, down from N$4.8 billion at the end of September.
“The liquid balances in the local banking sector declined as investors moved funds out in search of better yielding investment opportunities as well as for payment purposes outside the country.” The bank stressed that this movements were reflected in the elevated South African Rand outflow levels during the period under review.
Meanwhile, the central bank also reported that the annual growth in total private sector credit extension (PSCE) stood at 7% at the end of October 2018, increasing by 0.4% month-on-month.
“The growth in PSCE during the period under review was mainly driven by a higher demand for credit by both the business and household sectors specifically in the categories Other Loans and Advances and Overdraft Credit,” the bank stated.
The annual growth in credit extended to businesses stood at 7.1% at the end of October, while total credit extended to the household sector rose to 7% during October, both in line with the overall rise in demand for new credit.
“The annual growth in overdraft credit increased to 7.2% in October from a growth of 2.9% at the end of the preceding month. The sharp growth was due to a higher demand for overdraft credit by the business sector specifically in the mining, services, manufacturing and fishing sectors,” the bank stated.