{"id":17564,"date":"2018-07-02T17:40:10","date_gmt":"2018-07-02T15:40:10","guid":{"rendered":"http:\/\/www.ijg-research.net\/?p=17564"},"modified":"2018-07-02T17:40:10","modified_gmt":"2018-07-02T15:40:10","slug":"psce-may-2018","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-may-2018\/","title":{"rendered":"PSCE \u2013 May 2018"},"content":{"rendered":"

\"\"<\/a><\/p>\n

Overall<\/strong><\/p>\n

Private sector credit extension (PSCE) increased by N$143.5 million or 0.15% m\/m in May, bringing the cumulative credit outstanding to N$92.8 billion. On a year-on-year basis, private sector credit extension increased by 5.5% in May, slower than the 6.0% increase recorded in April. On a rolling 12-month basis N$4.8 billion worth of credit was extended to the private sector, with individuals taking up N$3.1 billion while N$1 billion was extended to corporates. Claims on non-resident private sector credit contracted by 0.9% m\/m and increased by 130.0% y\/y.<\/p>\n

\"\"<\/a><\/p>\n

Credit extension to households<\/strong><\/p>\n

Over that past twelve months, households have taken up N$3.1 billion worth of credit, accounting for 64% of the twelve-month cumulative credit issued as at May 2018. From a year-on-year basis, credit extended to individuals increased by 6.1% May slowing from the 6.9% y\/y growth recorded in April. Month-on-month, household credit extension contracted by 0.3% in May following a 0.5% m\/m increase registered in March. The slight decline in appetite for household credit in general is largely attributable to growth in mortgage loans slowing to 6.7% y\/y and contracting by 0.8% m\/m. Installment credit which started contracting on a year-on-year basis in August 2017, remains further depressed in May, contracting by 3.9% y\/y and 0.5% m\/m. Use of overdraft facilities increased by 1.7% y\/y in May following a 1.1% y\/y increase recorded in April, while registering a 3.0% m\/m increase.<\/p>\n

\"\"<\/a><\/p>\n

Credit extension to corporates<\/strong><\/p>\n

Credit extended to corporates ticked up slightly month-on-month, increasing by 0.9% in May following a 0.3% contraction two months ago and printing flat in April. Year-on-year credit extension to corporates increased by 6.3% in May, increasing quicker than the 4.5% y\/y recorded in April. The increase in overall loans to corporates was buoyed by a 10.2% y\/y increase in mortgage loans to corporates, 3.7% y\/y increase in other loans and advances, as well as overdraft facilities growing by 3.1% y\/y. Installment credit extended to corporates, remained depressed, contracting by 7.9% y\/y in May. This persistent contraction in installment credit to corporates (since February 2017) further suggests that businesses are financing fewer and fewer capital goods, and as such are not expanding operations which is testament of the current recessionary environment.<\/p>\n

\"\"<\/a><\/p>\n

Banking Sector Liquidity <\/strong><\/p>\n

The overall liquidity position of commercial banks increased by N$732 million to an average of N$4.0 billion during May. Bank of Namibia credits this improvement in liquidity to maturities of treasury bills towards the end of May. The increased liquidity position further reduced the value of repo facilities utilized by commercial banks. The value of repo’s moderated from N$144 million in April to N$92 million during the first half of May with the banks not making use of the facility for the rest of the month.<\/p>\n

\"\"<\/a><\/p>\n

Reserves and money supply<\/strong><\/p>\n

Foreign reserve balances decreased by N$2.5 billion to N$28.2 billion in May. This decrease was largely a result of commercial banks taking advantage of favorable investment conditions abroad, according to the Bank of Namibia.<\/p>\n

\"\"<\/a><\/p>\n

Outlook<\/strong><\/p>\n

Private sector credit extension growth remained depressed at the end of May, struggling for the past ten months to reach growth of 7% y\/y and above. It has been 19 months since PSCE last recorded double digit growth. The inflation outlook has deteriorated somewhat over the last few months due to dollar strength and an increase in oil prices. As a result, the SARB will be mindful of the risks posed to their inflation outlook, increasing the likelihood of rate hikes going forward. Overall market expectations at present are for interest rates to remain stable for the rest of the year, with a small sample of participants expecting at least one 25bps hike towards the end of 2018. BoN left rates unchanged following the SARB\u2019s decision to keep its rate at 6.5%. BoN will further be satisfied with maintaining the 25bps buffer between its repo rate and that of SA following a N$2.5 billion decrease in foreign reserves.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit extension (PSCE) increased by N$143.5 million or 0.15% m\/m in May, bringing the cumulative credit outstanding to N$92.8 billion. On a year-on-year basis, private sector credit extension increased by 5.5% in May, slower than the 6.0% increase recorded in April. On a rolling 12-month basis N$4.8 \u2026 Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,22],"tags":[],"class_list":["post-17564","post","type-post","status-publish","format-standard","hentry","category-economicresearch","category-psce"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/17564","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/comments?post=17564"}],"version-history":[{"count":2,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/17564\/revisions"}],"predecessor-version":[{"id":17572,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/17564\/revisions\/17572"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=17564"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=17564"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=17564"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}