The stock of foreign reserves declined moderately at the end of May to N$25,4 billion compared to N$25,7 billion in April, the Bank of Namibia announced this week.
The central bank attributed the decline to Government payments and appreciation of the Namibian dollar.
Data from the apex bank also showed growth in total private sector credit extension (PSCE), with annual growth rising moderately to 8,5 percent at the end of May, reflecting a slight increase of 0,4 percentage points, from 8,1 percent in the preceding month.
The moderate increase was mainly driven by the increase in the demand for credit by the corporate sector.
The annual growth in overdraft credit rose at the end of May to 17,3 percent, compared to 12,3 percent at the end of April.
Total PSCE in nominal terms stood at N$87,4 billion at the end of May, the report said.
In contrast, growth in credit extended to individuals moderated at the end of May to 8,5 percent, 0,2 percentage points lower than 8,7 percent recorded in April.
The overall liquidity position of the banking sector increased to N$3,3 billion at the end of May compared to N$1,8 billion at the end of April, stimulated by diamond sales and GIPF acquisition of Capricorn, the central bank said.
“The substantial increase emanated from diamond sales. In addition, GIPF’s acquisition of stake in Capricorn Investment Holdings (the owners of Bank Windhoek) also contributed towards the improved liquidity conditions of the banking sector,” the report said.
Broad money supply (M2) rose at the end of the review period to 6,6 percent from a lower growth rate of 3,5 percent at the end of the preceding month.
The central bank attributed the rise in M2 to an increase in domestic claims in the form of credit extended to the private sector during the review period.