THE overall liquidity position of commercial banks rose during December 2018.
The liquidity position of commercial banks rose to N$2.8 billion in December 2018 from N$2.3 billion at the end of November 2018.
The position slightly improved due to increased foreign currency inflows for corporate tax payments to the State in December.
The annual growth in broad money supply (M2) slowed further at the end of December 2018. The annual growth in M2 slowed by 1.1% month-on-month to 6.4% at the end of December 2018. M2 is the broad money base. It consists of perfectly liquid financial instrument such as cash deposits.
The slower growth in M2 was mainly driven by decline in domestic claims specifically, claims to other sectors. The slower growth in M2 was further reflected in the declining levels of other deposits, as well as the contracted growth in currency in circulation during the period under review.
The annual growth in total overdraft credit slowed during December 2018.
The annual growth in overdraft credit slowed significantly to 10% in December 2018, decreasing by 3.7% points month-on-month compared to the preceding month. The decline was due to repayments made by the business sector during the review period.
Annual growth in other loans and advances (i.e. personal/commercial loans and credit cards) slowed further during December 2018, despite maintaining double digit growth rates
The annual growth in other loans and advances slowed for a second month in a row to 21.6% at the end of December 2018. The slower growth was underpinned by decreases in volumes of borrowed funds over the year to date by both the household and business sectors.