Banking liquidity dropped drastically in January
The Bank of Namibia announced that the liquidity position of commercial banks decreased drastically to N$262.1 million in January 2019, down from a high of N$2.8 billion at the end of December 2018.
This decline was mainly due to corporate tax payments made at the end of December 2018, as well as the customary slow spending from the Government during January of each year.
Meanwhile, the stock of foreign reserves decreased by 1.1%, month-on-month, to N$30.7 billion at the end of January 2019. The month-on-month decline in reserves was mainly due to net purchases of the South African Rand by commercial banks for purposes of investments abroad and import payments.
The central bank further noted that the annual growth in total private sector credit extension moderated further to 6.5% at the end of January 2019, representing a month-on-month decline of 0.2%. The slower growth was driven by lower demand for credit by households as well as businesses during the period under review.