Namibia’s broad money supply increased by N$12.7 billion over the 12 months to March 2026, although annual growth slowed to 7.9%, according to Simonis Storm Economist Almandro Jansen.
Jansen said the country’s broad money supply, also known as M2, stood at N$173.9 billion in March, compared to growth of 8.7% recorded in February.
Broad money supply refers to the total amount of money circulating in the economy, including cash, money in bank accounts, savings and fixed deposits. It is an important indicator of economic activity and inflation trends.
“The M2 stock stands at N$173.9 billion, having expanded by N$12.7 billion over the twelve months to March,” Jansen said.
He said growth in money supply was mainly supported by stronger domestic lending, while declining foreign assets reduced overall liquidity conditions.
According to Jansen, Namibia’s net foreign assets declined by N$15.6 billion during the period as banks reduced their foreign asset holdings.
“Net foreign assets of the depository corporation system contracted 17.6% year-on-year in March 2026,” he said.
At the same time, domestic claims rose strongly, driven largely by increased government borrowing from local banks.
“Domestic claims expanded 15.8% year-on-year in March 2026. The primary driver within domestic claims is a 54.8% year-on-year surge in net claims on central government,” said Jansen.
The banking sector also recorded higher liquidity levels in March, supported by government spending and inflows from diamond sales.
“The commercial banking sector’s average cash position rose 24.0% month-on-month to N$7.8 billion in March 2026 from N$6.3 billion in February,” he said.
Meanwhile, the Namibian dollar weakened against the US dollar during March.
“The Namibian dollar depreciated 7.5% against the US dollar during March 2026, moving from N$15.91 per dollar at end-February to N$17.10 per dollar at end-March,” said Jansen.
Inflation, however, continued to slow during the period.
“Namibia’s headline inflation fell further to 2.1% in March 2026 from 2.4% in February and 2.9% in January,” Jansen said.
Despite the current easing in inflation, Jansen warned that inflationary pressures could rise again later this year due to external risks and exchange rate movements.
“A rebound in headline inflation toward 4.0% to 5.0% is now our central scenario for the second half of 2026,” he said.
