THE quarterly inflow of the Southern African Customs Union (SACU) receipts at the beginning of April has driven the increase of reserves by 13.8 per cent to E10.4 billion.
This is according to the Central Bank of Eswatini (CBE) monthly statistical release report of March/April, which explained that the increase also reflected a rise of 5.2 per cent yearly.
“At this level, the reserves were enough to cover 2.4 months of imports, up from the 2.1 months recorded in March,” reads the report.
In March, CBE reported that reserves declined by 25.8 per cent month-on-month from E12.3 billion in February to E9.1 billion.
The month-on-month contraction was attributed to a net outflow of Rands from trades with local banks, coupled with the payment of government fiscal obligations.
The reduction in reserves translated to a growth of 16.6 per cent year-on-year.
As a result, the reserves import cover declined from 2.9 months in February to 2.1 months in March.
In April when valued in special drawing rights (SDR), the reserves reached SDR412.1 million at the end of the month, reflecting a month-on-month increase of 10.2 per cent and a year-on-year rise of 3.1 per cent.
At the end of March, credit extended to the private sector amounted to E21.4 billion, reflecting a month-on-month decline of 0.4 per cent and a year-on-year growth of 10.8 per cent.
The month-on-month decrease was on account of a fall in credit to all subsectors, namely, credit to other sectors of the domestic economy, businesses and households and non-profit institutions serving households (NPISH).
Credit to other sectors of the domestic economy stood at E1.1 billion at the end of March, reflecting a decline of 3.1 per cent month-on-month and 1.3 per cent year-on-year.
The decrease was observed across all sub-sectors. credit to parastatals fell by 3.9 per cent to E478.1 million, credit to other financial corporations decreased by 2.5 per cent to E515.5 million and credit to local government declined by 1.9 per cent to E72.8 million.
Credit to businesses receded marginally by 0.4 per cent month-on-month, but registered robust year-on-year growth of 18.3 per cent to close at E11.5 billion at the end of March.
The month-on-month reduction was observed in credit to distribution and tourism as well as transport and communications sub-sectors, which fell by 5per cent.
an expansion was observed in some sub-sectors:, including manufacturing (5.7 per cent), agriculture and forestry (1.5 per cent), construction (0.9 per cent), community, social and personal services (0.8 per cent), mining and quarrying (0.8 per cent) and real estate (0.7 per cent).
Furthermore, an analysis of credit to businesses by size showed that the overall fall in total credit to businesses was driven by large enterprises, whose credit declined by 3.2 per cent to E7.9 billion, accounting for 68.6 per cent of total credit to businesses.
In contrast, credit extended to micro small and medium enterprises (MSMEs) rose by 6.5 per cent to E3.6 billion, representing 31.4 per cent of total credit to businesses
Credit to households and NPISH amounted to E8.8 billion at the end of March, decreasing by 0.1 per cent month-on-month, but grew by 3.8 per cent year-on-year.
Accounting for the month-on-month decline in credit to households were mortgage loans, which fell by 2.7 per cent to E4.3 billion at the end of March.
In contrast, growth was observed in both personal (unsecured) and motor vehicle loans, which grew by 3.3 per cent to E3.4 billion and by 0.1 per cent to E1.2 billion, respectively.
net claims on government held by the banking sector grew significantly from E948.7 million in February to E2.3 billion in March.
The sharp increase was on account of an advance from the CBE.
Total claims on government rose by 16 per cent to E9.2 billion in March.
In contrast, government deposits declined by 0.9 per cent to settle at E6.9 billion at the end of March.
At the end of March, M2 stood at E23.7 billion, reflecting a decline of 7.7 per cent month-on-month and an expansion of 13.4 per cent year-on-year.
The month-on-month reduction in M2 was recorded in both components; quasi money and narrow money supply (M1).
Quasi money supply contracted by 11per cent month-on-month but rose by 11.2 per cent year-on-year to settle at E14.2 billion at the end of March.
The month-on-month contraction was on account of time deposits, which fell by 12.7 per cent to E12.2 billion.
savings deposits increased by 1.4 per cent to E2.0 billion at the end of March.
Narrow money supply (M1) amounted to E9.5 billion at the end of March, down by 2.3 per cent month-on-month, but up by 16.8 per cent year-on-year.
The month-on month decline was driven by both of its components: transferable (demand) deposits receded by 2.3 per cent to E8.7 billion, while Emalangeni outside the banking sector decreased by 2.2 per cent to E836.9 million.
