14.8% reduction in official reserves
services (-0.7 per cent). However, growth was observed in the following subsectors; manufacturing (2.3 per cent), construction (1.3 per cent), transport & communication (1.2 per cent), as well as real estate (1.2 per cent).
An analysis of credit to businesses by size showed that credit to large enterprises receded by 2.8 per cent month-on-month and rose by 1.2 per cent year-on-year to E6.2 billion at the end of February 2024. Credit to small & medium enterprises (SMES), on the other hand, expanded by 1.4 per cent month-on-month and 21.2 per cent year-onyear to stand at E3.0 billion at the end of February 2024.
Credit extended to households & NPISH closed the month under review at E8.5 billion, higher by 0.7 per cent month-onmonth and 5.5 per cent year-on-year. Responsible for the increase were mortgage and other personal (unsecured) loans, which grew by 0.9 per cent to E4.3 billion and 0.7 per cent to E3.2 billion, respectively. In contrast, motor vehicle loans contracted slightly by 0.03 per cent to E1.1 billion at the end of February 2024.
Net claims on government by the banking sector rose by 25.7 per cent month-onmonth and fell by 28.2 per cent year-on-year to close the month under review at E2.1 billion. The notable increase in net claims on government was mainly attributed to an advance from the Central Bank received during the month under review.
Consequently, claims on government rose by 11.5 per cent to E7.2 billion. Government deposits, however, rose by a margin of 6.7 per cent to reach E5.1 billion at the end of February 2024. Broad money supply (M2) decelerated by 2.2 per cent month-onmonth, however, grew by 13.8 per cent yearon-year to reach E22.7 billion at the end of February 2024, in accordance with the fall in private sector credit and external sector assets.
The month-on-month reduction in M2 was recorded in narrow money supply whereas quasi money supply increased. Narrow money supply (M1) amounted to E9.1 billion at the end of February 2024, lower by 5.9 per cent month-on-month and higher by 19.6 per cent year-on-year. The month-on-month contraction in M1 was recorded in transferable (demand) deposits, which fell by 6.7 per cent to E8.3 billion at the end of February 2024.
Emalangeni outside depository corporations, on the contrary, rose by 4.0 per cent to E737.9 million at the end of February 2024. Quasi-money supply improved slightly by 0.5 per cent month-on-month and 10.3 per cent year-on-year to close the month under review at E13.6 billion.
The expansion in quasi-money was registered in time deposits, which grew by 0.8 per cent to E11.6 billion. Savings deposits, on the other hand, receded by 1.3 per cent to E2.0 billion at the end of February 2024.
The liquidity position of the banking industry improved by 0.5 per cent monthon-month and 9.4 per cent year-on-year to reach E7.6 billion at the end of February 2024. Growth in domestic liquid assets was due to an increase in the banks’ balances held with other local banks, Central Bank as well as government securities.
Therefore, the liquidity ratio rose to 34.7 per cent in February 2024 from 33.8 per cent in January 2024.