Investments abroad, import payments contribute to foreign reserves dip – BoN
The stock of foreign reserves declined on a monthly basis during January 2019, according to the Bank of Namibia’s latest Money and Banking Statistics report.
The level of international reserves decreased to N$30.7 billion at the end of January from N$31 billion recorded in the December 2018.
“The decrease in the level of reserves is mainly due to net purchases of the South African rand by commercial banks for purposes of investments abroad and import payments,” the central bank said.
Looking ahead, PSG Wealth Management stated that inflows from the South African Customs Union (SACU) will be lower than in recent years due to South Africa’s lackluster economic growth.
“The South African Treasury has revised its projections for overall Sacu payments lower over the medium term, during its February budget. On the bright side, inflows from the African Development Bank loan agreement will continue to boost foreign reserves this year,” PSG added.
In general, the growth in monetary aggregates and reserves is well below levels seen during the economic boom years of 2010-15, suggesting sluggish GDP growth.
