Namibia’s banking sector maintained adequate liquidity in December 2025, with conditions continuing to normalise following the Eurobond redemption, despite some month-on-month volatility, according to Simonis Storm.
Simonis Storm economist Almandro Jansen said average commercial bank cash balances eased slightly to N$5.1 billion in December, from N$5.4 billion in November, reflecting softer inflows partly linked to weaker diamond sales.
“Liquidity levels remain broadly adequate, and banks continue to operate with sufficient buffers to support credit extension, settlement activity and normal interbank functioning,” Jansen said.
Official international reserves increased to N$51.6 billion in December, representing a 4.9% month-on-month rise. This equates to 3.3 months of import cover, or 3.8 months when oil and gas-related imports are excluded.
“The December reserve outcome reinforces the view that the sharp drawdown recorded in October was anticipated and well managed, in line with Namibia’s debt management strategy, rather than indicative of balance-of-payments stress,” Jansen said.
Growth in the broad money supply (M2) continued to moderate, slowing to 6.5% year-on-year in December from 7.1% in November. Simonis Storm said the trend reflects weaker net foreign asset dynamics and a deceleration in deposit growth.
Longer-term deposit growth eased to 9.4% from 12.3% in November, while currency outside depository corporations declined to 4.2% from 4.6%. In contrast, short-term transferable deposits recorded firmer growth, supported by increased household demand during the festive season.
Domestic claims rose by 16.8% year-on-year, up from 15.9% in November, driven by higher net claims on central government and increased lending to other sectors.
These gains were partly offset by a contraction in net foreign assets, which declined by 8.0% year-on-year, compared to a 3.4% fall in November, reflecting lingering effects from the Eurobond redemption.
Jansen said the tightening in liquidity conditions observed in October was temporary.
“The post-redemption adjustment phase appears largely complete, with liquidity conditions now transitioning towards a more stable, albeit slightly tighter, equilibrium,” he said.
Overall, Simonis Storm said the data indicate that Namibia’s banking system has absorbed the one-off liquidity shock associated with the Eurobond repayment. Despite slower money supply growth, reserve buffers, deposit levels and liquidity remain sufficient to support ongoing credit activity.
“The banking sector continues to function with resilience, and the combination of adequate reserves and controlled liquidity provides a solid foundation for continued credit extension and economic activity,” Jansen said.
