The stock of international reserves held by the Bank of Namibia declined both on a monthly and annual basis, at the end of October, according to the latest Bank of Namibia (BoN) money statistics.
The stock of foreign reserves decreased by 4.2 percent, month-on-month and by 1.4 percent, year-on-year to N$31.2 billion at the end of October.
“The monthly and annual decrease in reserves was partly on account of net capital outflows from the commercial banks as a result of increased foreign currency purchases, coupled with net government payments and the exchange rate appreciation,” the central bank said.
Liquidity levels of the banking industry slowed to N$3.4 billion during October, from N$4.7 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 growth in total credit extended to businesses continued an upward trend during October.
The annual growth in credit extended to businesses stood at 7.1 percent, compared to 6 percent at the end of September.
“The improved growth was driven by an uptake of short-term credit facilities by businesses in the services, fishing, manufacturing and mining sectors during the period under review,” the central bank said.
Credit extended to the household sector rose slightly to 7 percent from 6.9 percent reported at the end of September.
“The meagre increase in credit extended to the household sector was underpinned by a higher uptake of mortgage credit, coupled with the continued increase in other loans and advances during the month under review.”
The annual growth in total overdraft credit increased significantly in October to 7.2 percent from 2.9 percent.
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.
In terms of inflation, annual inflation rate stood at 5.1 percent in October, higher than 4.8 percent in September.
“The rise in inflation during the period under review was mainly triggered by increases in the categories; transport, education as well as alcoholic beverages and tobacco.”