Gross Official Reserves Improve to Stand at E8.2 Billion

By Avite Mbabazi

According to the Central Bank of Eswatini (CBE) Monthly Statistical Release for September/October, credit extended to businesses was up by 3.9% by the end of September to stand at E8.3 billion. That indicates an increase of 17.8% year-on-year.

This increase in credit to businesses was seen in the following subsectors; community, social & personal services (17.6 %), distribution & tourism (6.6 %), construction (2.8 %), real estate (2.7 %), agriculture & forestry (1.4 %), manufacturing (1.2 %) as well as mining & quarrying (0.1 %). However, credit to the transport & communication sector declined by 0.2 % over the month under review.

Meanwhile, gross official reserves have reportedly increased by 18% from September 2022 to reach E8.2 billion at the end of October 2022. This increase in the country’s economic buffers has been attributed to an inflow from Southern African Customs Union (SACU) revenue at the beginning of October 2022. As it stands the country’s reserves are enough to cover 2.8 months of imports and represent an improvement from the 2.4 months of import cover reported in September.

On the other hand, the overall liquidity position of banks’ assets has been reported to be E6.6 billion at the end of September 2022. This is a decline of 5.5 % month-on-month and 17.0 % year-on-year. According to the CBE, this contraction was due to a negative change in the banks’ balances held with the Central Bank as well as cash in the bank’s tills. Moreover, the banks’ liquidity ratio fell to 31.6 % from 34.8 % in August 2022.

Due to an advance from the CBE, net claims on government held by the banking sector were E3.1 billion at the end of September 2022, which is an increase of 8.1 % month-on-month and 75.5 % year-on-year. The advance from the Central Bank, moreover, resulted in a month-on-month growth of 5.8 % in claims on government, whereas, government deposits increased at a lower rate of 4.3 % from August 2022.

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