CBL sets mon­e­tary pol­icy rate

Lesotho Times - - Business -

...from page 17 “This ex­pan­sion in money sup­ply was a re­sult of an in­crease in net for­eign as­sets at­trib­ut­able to a pick-up in com­mer­cial banks’ other de­posits with for­eign banks,” said Dr Mat­lanyane.

“The prime lend­ing rate in­creased from 10.44 per­cent in June to 10.69 per­cent dur­ing the third quar­ter. How­ever, the 91-day Trea­sury Bill rate re­mained un­changed at 6.25 per­cent. The do­mes­tic and SA Trea­sury bill rates re­mained aligned.”

On the ex­ter­nal sec­tor front, she said there was im­prove­ment in the third quar­ter.

“The cur­rent ac­count deficit nar­rowed to 4.8 per­cent of GDP dur­ing the third quar­ter, af­ter a re­vised deficit of 7.2 per­cent of GDP in the pre­vi­ous quar­ter.

“This pos­i­tive de­vel­op­ment is due to an in­crease in mer­chan­dise ex­ports due to the growth in tex­tiles and cloth­ing ex­ports as well as an im­prove­ment in di­a­mond ex­ports, while cur­rent trans­fers slowed down as a re­sult of a de­cline in SACU (South­ern African Cus­toms Union) re­ceipts,” Dr Mat­lanyane said.

“Gross in­ter­na­tional re­serves mea­sured in months of im­port cover de­clined to 6.1 months in the third quar­ter from 6.3 months in the pre­vi­ous quar­ter, on ac­count of an in­crease in pay­ments for im­ports.”

She also noted that govern­ment bud­getary op­er­a­tions had re­sulted in a deficit of 6.3 per­cent of GDP at the end of Septem­ber 2015 com­pared with a sur­plus of 14.9 per­cent of GDP re­alised at the end of the se­cond quar­ter.

“In terms of the out­look, fis­cal bal­ance is ex­pected to re­main in deficit ter­ri­tory in the next two to three fis­cal years, largely at­trib­ut­able to the de­cline in SACU rev­enue,” Dr Mat­lanyane said, adding that the MPC would con­tinue to mon­i­tor do­mes­tic and in­ter­na­tional de­vel­op­ments and to un­der­take ap­pro­pri­ate pol­icy de­ci­sions to en­sure that the loti-rand ex­change rate par­ity is main­tained.

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