Times Of Swaziland: IMF LOAN PROCEEDS BOOST RESERVES

IMF LOAN PROCEEDS BOOST RESERVES
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BY ASHMOND NZIMA  on 07/10/2020 23:19:00


MBABANE – The country has recorded the highest gross official reserves figures
for the year in the end of the past month.
According to figures from the Central Bank of Eswatini (CBE), gross official
reserves stood at E9.3 billion at the end of September 2020, depicting an
increase of 10.5 per cent over the month and 75.3 per cent year-on-year.  In
line with the improvement in  reserves,  the  import  cover increased  to a
notable  3.9  months  in  September  2020, from 3.5 months in August 2020. The
reserves were boosted by foreign exchange proceeds from the international
Monetary Fund (IMF) budget support loan to government received over the month.
The amount from IMF was about E1.8 billion.
reserves
Valued in special drawing rights (SDRs), the reserves grew to SDR397.3 million
at the end of  September  2020,  from  the  SDR357.9 million  registered from 
the  previous  month. This was equivalent to growth of 11.0 per cent
month-on-month and 54.2 per cent over the year.
One common rule is that reserves covering three months’ worth of imports are
adequate.
Meanwhile, credit extended to the private sector, according to the CBE report,
grew by one per cent from the previous month. However, it decreased by 0.4 per
cent over the year to settle at E14.9 billion at the end of August 2020.
The rise in private sector credit was driven by credit to other sectors and
households while credit to businesses declined over the review period.
“Credit extended to other sectors expanded by 9.8 per cent over the month and
4.8 per cent over the year to close at E1.5 billion at the end of August 2020.
“The month-on-month growth was driven by all components; credit to local
government (36.8 per cent); credit to parastatals (9.2 per cent) and credit to
other financial corporation’s (9.0 per cent). Credit  extended to  households
and  NPISH amounted  to  E6.8  billion  at  the  end  of  August 2020, 
reflecting  an  increase  of 0.6  per  cent month-on-month and  5.9 per  cent 
year-on-year,”  reads the report.
Contributing to the growth was credit to other (unsecured) loans, which grew by
7.5 per cent to close at E2.4 billion at the end of August 2020.Partly
offsetting the increase was a fall in mortgage loans (-3.2 per cent) as well as
motor vehicle loans (-0.7 per cent) to reach E3.6 billion and E914.3 million,
respectively.
contraction
Credit extended to businesses, on the other hand, declined by 0.5 per cent over
the month and 7.2 per cent over  the  year  to  close  at  E6.5  billion  at 
the  end  of  August 2020.Contributing to the contraction was credit to these
subsectors; manufacturing (-4.2per cent), real estate  (-3.4 per cent),
transport and communication (-2.3 per cent) and community, social and personal
services (-2.2 per cent).