STORIES BY BUSINESS EDITOR
MBABANE – Loans extended to businesses grew by 1.8 per cent last month to reach E18.9 billion in November 2023. The amount stood at E18.6 billion the previous month.
This was mentioned by the Central Bank of Eswatini (CBE) in their latest monthly statistical release for the month of October/November.
CBE said the credit extended to the private sector edged up by 1.8 per cent from the previous month and 11.0 per cent year-on-year to close the month under review at E18.9 billion.
“The increase was registered in credit to businesses and households & non-profit institutions serving households (NPISH). Credit to other sectors of the domestic economy, on the other hand, declined over the month under review,” added CBE.
They further mentioned that the credit extended to the business sector grew by 2.3 per cent month-on-month and 11.5 per cent year-on-year to stand at E9.4 billion at the end of October 2023.
“The improvement was recorded in credit to the following subsectors: distribution & tourism (6.6 per cent), construction (4.9 per cent), community, social & personal services (2.7 per cent), real estate (2.2 per cent), manufacturing (1.1 per cent) and transport & communication (1.1 per cent). The increase was partly dampened by a contraction of credit to the following subsectors: mining & quarrying (-4.2 per cent) and agriculture & forestry (-3.9 per cent),” availed the report.
Broad money supply (M2) reached E22.7 billion at the end of October 2023, reflecting a month-on-month and year-on-year growth of 2.8 per cent and 7.5 per cent, respectively.
CBE said the increase in M2 was in line with the improvement observed in both net foreign assets and private sector credit. They said the rise in M2 was registered in both components; quasi money supply and narrow money supply (M1).
The monthly report further availed that quasi money supply accelerated by 4.1 per cent month-on-month and 5.9 per cent year-on-year to settle at E13.8 billion at the end of October 2023. “Responsible for the month-on-month growth in quasi money were both components, time and savings deposits,” added CBE.
“Time and savings deposits went up by 4.7 per cent to E11.7 billion and 0.8 per cent to E2.1 billion, respectively. M1 stood at E8.8 billion at the end of October 2023, reflecting a month-on-month and year-on-year growth of 0.8 per cent and 10.0 per cent, respectively,” added the bank.
The expansion in M1 was attributed to transferable (demand) deposits, which rose by 1.2 per cent to E8.0 billion. Emalangeni outside depository corporations, on the other hand, receded by 3.5 per cent to E820.6 billion at the end of October 2023.
LIQUIDITY OF THE BANKING INDUSTRY NOW E7.1 BILLION
MBABANE – The overall liquidity of the banking industry amounted to E7.1 billion at the end of October 2023, higher by 1.1 per cent relative to September 2023 and 1.2 per cent over the year.
The Central Bank of Eswatini (CBE) said the increase stemmed from the banks’ Rand holdings, balances held with local banks and investment in government securities. They said the liquidity ratio rose slightly by 0.8 percentage point to reach 34.2 per cent at the end of October 2023.
A further analysis of credit to businesses showed that, credit to small & medium enterprises (SMEs), which accounted for 30.2 per cent of total credit to businesses, rose by 2.5 per cent month-on-month and 14.7 per cent year-on-year to settle at E2.8 billion at the end of October 2023.
Similarly, CBE said credit to large enterprises, which accounted for 69.8 per cent of total credit to businesses, rose by 2.2 per cent month-on-month and 10.2 per cent year-on-year to close the review month at E6.5 billion.
CBE added that the Preliminary gross official reserves declined by 3.1 per cent month-on-month and grew by 31.5 per cent year-on-year to settle at E9.4 billion at the end of November 2023. The month-on-month contraction was mainly attributed to a net outflow of Rands from trades with local banks coupled with payment of government’s fiscal obligations over the month under review.
The reserves were enough to cover 2.9 months of imports of goods and services, lower than the 3.0 months observed in October 2023. Valued in special drawing rights (SDR), the reserves amounted to SDR374.4 million at the end of November 2023, reflecting a decline of 4.9 per cent month on-month and an increase of 16.9 per cent year-on-year.
