Namibia’s international reserves have surged to an all-time high of N$60.8 billion, marking a significant 5.5% increase from June 2023, data from Cirrus shows.
According to Cirrus’ latest report, the growth in international reserves is primarily attributed to a quarterly payment from the Southern African Customs Union (SACU) amounting to N$7.0 billion and an increase in customer foreign currency placements used for hard currency transactions.
“The persistent rise in international reserves is encouraging, particularly given the extended interest rate differential between Namibia and South Africa,” the report says.
The report stated that the increase also comes ahead of the first repayment of the IMF Rapid Financing Instrument, which will amount to approximately N$575.0 million.
Furthermore, the report shows that at the end of June 2024, Namibia’s international reserves were sufficient to cover 3.8 months of imports.
This coverage improved to 4.1 months overall, or 4.9 months when excluding imports related to oil and gas exploration, by July 2024.
The improvement in import coverage indicates a strengthened buffer for the Namibian economy, providing greater resilience against external shocks.
“For July 2024, this improved to 41 months overall, or 4.9 months excluding the oil-related imports,” the report says.
In addition to the rise in international reserves, Namibia’s central government’s net balance at the Bank of Namibia also saw an improvement, increasing by N$1.2 billion month-on-month to reach N$95 billion.
This is the highest level since October 2021 when the government was preparing for the redemption of its first Eurobond.
“The balance benefits from the quarterly SACU payment along with tax payments. Nonetheless, such a large (and sustained) balance is a welcome development, particularly as the Government moves towards the period of the year when it sees fewer inflows and more outflows,” the report reads.
The report also said that the robust cash position should also enhance the government’s leverage in upcoming debt auctions, allowing it more flexibility in securing favourable terms.
