BANKING INDUSTRY LIQUIDITY AT E5BN
The banking industry’s liquidity position at the end of November 2018 stood at E5 billion, representing growth of 10.5 per cent from October 2018.
This is according to the monthly statistical release for November/ December 2018 released by the Central Bank of Eswatini (CBE).
The recent liquidity position is an improvement in banks’ liquid assets which emanated from banks’ balances with CBE, as well as their investment in government securities over the month under review.
According to the report the liquidity ratio also rose from 27.3 per cent recorded in October 2018 to 29.3 per cent at the end of November 2018. When compared over the year, banks’ domestic liquid assets grew by 13.0 per cent.
On another note, Broad Money Supply (M2) continued to grow steadily reflecting a month-on-month growth of 2.4 per cent at the end of November 2018 from 1.6 per cent realised in October 2018. The month-on-month increase in M2 was driven by quasi money supply, which surpassed a contraction in narrow money supply. Compared annually, M2 improved by 2.4 per cent.
Quasi money supply stood at E12.4 billion at the end of November 2018, 4.2 per cent higher than in the previous month. Growth in quasi money was attributed to both time and savings deposits. Time deposits accelerated by 4.5 per cent to settle at E10.7 billion while savings deposits rose by 2.6 per cent to E1.8 billion at the end of the review month.
The report also revealed that Narrow Money Supply (M1) declined by 1.3 per cent month-on-month to settle at E5.9 billion at the end of November 2018, on account of a reduction in transferable deposits. Transferable deposits contracted by 2.7 per cent to E5.2 billion over the review month. Emalangeni outside depository corporations, on the contrary, edged up by 10.0 per cent to E730.3 million.
“Net claims on government by the banking sector expanded by 69.7 per cent month-on-month to reach E1.4 billion at the end of November 2018. The improvement emanated from a combined effect of a rise in claims on government 4.7 per cent and a reduction in government deposits held by the banking sector -12.7 per cent. Compared annually, net claims on government trended downwards,” the report says.