Foreign reserves dip slightly in May
The level of international reserves decreased to N$34.1 billion at the end of May from N$34.2 billion recorded in the previous month, the central bank recorded.
The central bank attributes the decline mainly due to net capital outflows of foreign currency through commercial banks, coupled with net government payments during the month under review.
Regarding the money supply, broad money supply growth increased to 11.7% y-o-y in May 2019 from 9.9% y-o-y in the previous month. According to the central bank, the higher broad money supply growth rate stemmed from an increase in both net foreign assets and domestic claims, particularly claims on the private sector in the form of loans.
“On the bright side, inflows from multilateral loans will continue to buttress foreign exchange stocks this year. While the broad pickup in monetary and credit aggregates in April and May is welcome, a more sustained uptrend is needed to suggest that the overall economy is recovering,” Head of Research at PSG Konsult, Eloise du Plessis said.
Du Plessis further noted that export growth is expected to moderate this year due to the global economic slowdown and lower diamond production.
