INVESTMENTS, SAVINGS SAFE – CBE

MBABANE – Despite the volatile situation witnessed  in the past weeks, CBE has assured that the integrity of the country’s financial system is safeguarded.

Banks were not spared from the vandalism witnessed over a week ago with automated teller machines (ATMs) destroyed in some parts of the country, especially in Matsapha.  In the statement, the Central Bank of Eswatini (CBE) apologised for the constraints and interruptions in the optimal provision and availability of financial and banking services through either physical or electronic platforms businesses and the general public. In the statement, CBE acknowledged the importance of continued stability, integrity and reliability of financial and banking services to the economy. The Bank assured all stakeholders and the public that it would endeavour to ensure that the banking sector remained operational as far as possible while ensuring safety of assets and life. “The Bank further wishes to assure all stakeholders and the public at large of the safety of their investments, savings and deposits within the banking sector.

integrity

“The country has adequate reserves to safeguard the integrity of the financial system and maintain the peg between the Lilangeni and South African Rand including meeting future demand for foreign currency by customers,” said Governor Majozi Sithole.
Meanwhile, the country’s gross official reserves were last recorded at E8.2 billion at the end of the past month. They were higher by 16.1 per cent from April this year and 20.4 per cent year-on-year. This is as per the monthly statistical report from the Central Bank of Eswatini (CBE).  “The growth in reserves was mainly due to inflows from foreign exchange proceeds for government projects’ funding as well as revaluation gains from the depreciation of the Lilangeni/Rand against its major trading currencies over the month under review,” shared CBE.

As a result, the reserves were sufficient to cover 3.6 months of imports of goods and services. This was higher than the 3.1 months observed in May this year. Rules that have been used to guide reserve adequacy suggest that countries should hold reserves covering 100 per cent of short-term debt or the equivalent of three months worth of imports. Meanwhile, experts say civil unrest can fuel currency depreciation.  Yesterday South Africa’s Business Report shared that the Rand retreated significantly on Monday, falling to a two-month low as violent protests and industrial-scale looting in KwaZulu-Natal and Gauteng dealt a severe blow to investor confidence. Industrial activity ground to a halt in the neighbouring country as stores closed, with many businesses fearing falling prey to criminal elements. The Rand is said to have plunged more than two per cent during intra-day trade, touching R14.51 to the Dollar, before closing 0.17 per cent weaker at R14.41 by 5pm on the day. Market analysts said the domestic currency was heavily affected by the outbreak of violence after former president Jacob Zuma was imprisoned for 15 months.

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