{"id":29817,"date":"2021-11-01T17:23:23","date_gmt":"2021-11-01T15:23:23","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=29817"},"modified":"2021-11-01T17:23:25","modified_gmt":"2021-11-01T15:23:25","slug":"psce-september-2021","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-september-2021\/","title":{"rendered":"PSCE \u2013 September 2021"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

Private sector credit (PSCE) increased by N$799.6 million or 0.76% m\/m in September. PSCE grew by 2.74% y\/y in September, up from August\u2019s increase of 1.85% y\/y. On a 12-month cumulative basis, N$2.82 billion worth of credit was extended to the private sector. This represents an 89.9% y\/y increase from last September\u2019s 12-month cumulative issuance figure. This increase is due to base effects and does not indicate meaningful, above-trend growth in PSCE. Instead, PSCE growth has remained relatively stable, recording around 2.2% y\/y growth over the past few months after faltering for much of 2020, hence the intermittent large year-on-year increases. Individuals continue to take up the majority of this cumulative issuance. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Credit\nExtension to Individuals<\/strong><\/p>\n\n\n\n

Credit\nextended to individuals decreased by 0.18% m\/m but increased by 3.71% y\/y in\nSeptember. On a month-on-month basis, only one sub-category of loans and\nadvances increased, namely mortgage loans by 0.1% m\/m. The other two\nsubcategories of loans and advances; namely other loans & advances and\noverdraft, shrunk in September by 0.7% m\/m and 3.2% m\/m respectively.\nInstalment credit grew by 0.2% m\/m. On a year-on-year basis all subcategories\nof loans & advances, and instalment credit registered increases in\nSeptember. Specifically, mortgage loans increased by 4.3% y\/y, other loans\n& advances increased by 2.3% y\/y and overdrafts grew by 4.8% y\/y. Instalment\ncredit issued to individuals grew by 1.3% y\/y in September, marking the sixth\nstraight month of year-on-year increases in this category. Prior to this\nstreak, instalment credit shrunk year-on-year for the previous 20 months (back\nto August 2019). Despite structurally making up only 10-12% of the total credit\nextended to individuals, this sustained up-tick in instalment credit is perhaps\nan indicator of improving consumer demand. But again, this is a minor increase\nin a minor category and overall growth of credit extended to individuals\nremains sluggish.     <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Credit\nExtension to Corporates<\/strong><\/p>\n\n\n\n

Credit\nextended to corporates grew by 2.29% m\/m and 1.81% y\/y in September. Total\ncorporate loans & advances grew by 2.0% y\/y in September, driven by\nincreases in mortgage loans as well as other loans & advances with both\nsub-categories recording growth of 2.8% y\/y. Overdrafts decreased by 0.3% y\/y\nand instalment credit grew by 0.2% y\/y. The month-on-month increase in\ncorporate credit extensions was particularly strong in September, with the\n2.29% m\/m increase representing the largest month-on-month increase in 2021. This\nis due partially to base effects as August saw one of 2021\u2019s largest\nmonth-on-month decreases in credit extensions to corporates. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

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

The overall\nliquidity position of Namibia\u2019s commercial banks decreased in September,\nfalling by N$398.3 million to an average of N$1.40 billion. The BoN attributes\nthis to government borrowing activities resulting from a large September bond\nauction. Despite the decrease in liquidity, the total balance of repos\noutstanding decreased during September. The repo balance fell to N$907.7\nmillion at the end of September after starting at N$1.27 billion.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Reserves and Money Supply<\/strong><\/p>\n\n\n\n

Broad\nMoney Supply (M2) contracted by N$2.93 billion or 2.3% y\/y in September,\naccording to the BoN\u2019s latest monetary statistics. The money supply also\ndecreased by 0.1% m\/m and now stands at N$122.9 billion compared to the N$123.1\nbillion at the end of August. The BoN made a significant revision to the\ninternational reserve balance for the month of August in the latest data.\nPreviously the stock of international reserves was seen to decrease by 4.1 %\nm\/m in August to N$40.9 billion. As per the latest data, the stock of\ninternational reserves for August instead increased to N$44.9 billion. Using this\nrevised estimate, the BoN\u2019s stock of international reserves rose by 2.1% m\/m to\nN$45.9 billion in September. While the wording is unclear, the Bank of Namibia\nhas attributed the increased level of international reserves (read \u2013 the August\nadjustment) to the IMF\u2019s allocation of Special Drawing Rights (SDR) in August.  <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

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

PSCE growth in September remained subdued and broadly in line with the 2021 trend. We expect the Bank of Namibia\u2019s MPC to keep interest rates at their current level for the remainder of the year, but pressure is growing on the South African Reserve Bank to increase interest rates. This is because inflation is hovering around the 5.0% mark, and with inflation risks to the upside, the SARB may need to hike rates to keep inflation below their 6% y\/y targeted upper-bound. The SARB\u2019s MPC meets on 18 November with a rate hike looking more likely than at any other point in the year so far. Should the SARB raise rates, the BoN will surely follow. While this will likely have a negative impact on PSCE, there is argument to be made that because PSCE growth has been, and remains, so subdued that perhaps a rate hike won\u2019t make all that much difference. \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit (PSCE) increased by N$799.6 million or 0.76% m\/m in September. PSCE grew by 2.74% y\/y in September, up from August\u2019s increase of 1.85% y\/y. On a 12-month cumulative basis, N$2.82 billion worth of credit was extended to the private sector. This represents an 89.9% y\/y increase \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-29817","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\/29817","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=29817"}],"version-history":[{"count":1,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/29817\/revisions"}],"predecessor-version":[{"id":29824,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/29817\/revisions\/29824"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=29817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=29817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=29817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}