BY MBONGENI NDLELA

MBABANE – The Central Bank of Eswatini’s latest Monthly Statistical Release for August and September 2025 shows a steady and resilient economic environment, marked by strong growth in key areas such as foreign reserves, money supply, and household credit, despite some short-term fluctuations in other sectors.

Foreign Reserves Remain Strong

The country’s gross official reserves stood at E10.8 billion in September 2025, marking a 28% increase compared to the same period last year. This means Eswatini has built a stronger financial cushion against external shocks. However, on a month-to-month basis, reserves dipped by 9.2% due to foreign currency movements and government fiscal settlements. As a result, import cover fell slightly to 2.6 months, down from 2.9 months in August. Import cover reflects how many months of goods and services the reserves can pay for, and 2.6 months is still considered a comfortable buffer.

Private Sector Credit Holds Steady

Credit extended to the private sector totaled E21.2 billion in August 2025. While there was a 1.4% month-on-month decline, overall credit grew 5.4% compared to last year, signaling confidence among businesses and households to borrow and invest.

A closer look reveals:
– Business credit dipped slightly by 1.5% compared to July, but was still 10.2% higher than last year.
– Large companies saw slight growth in borrowing, while SMEs experienced a 5.6% contraction, highlighting the need to support smaller enterprises more actively.
– Household credit grew by 1% month-on-month, driven by rising vehicle and personal loans. Motor vehicle loans rose by 2.6%, while unsecured personal loans increased by 2.0%. Mortgage lending remained stable with only a minor 0.2% dip.

Money Supply Expands

The broad money supply (M2) — a key measure of all money circulating in the economy — climbed to E25.7 billion in August 2025, reflecting a 1.9% month-on-month and 3% year-on-year increase. This was largely driven by a rise in time and savings deposits, showing that both individuals and businesses are keeping more money in banks, which strengthens financial stability.

Bank Liquidity Improves

The liquidity position of Eswatini’s banking sector strengthened notably during this period. Domestic liquid assets increased by 9.6% month-on-month to reach E8.8 billion in August. Though this figure is 3.1% lower than last year, the short-term improvement reflects a healthier financial position for banks, allowing them to respond more effectively to lending and cash demands.

Interest Rates Remain Stable

For consumers and businesses, borrowing conditions remain predictable. The discount rate remains at 6.75%, and the prime lending rate is steady at 10.25% as of September 2025. These stable rates are key for planning and investment, providing certainty for borrowers and investors alike.

The Takeaway

The Central Bank’s report highlights a balanced economic picture:
– Strong foreign reserves, despite a monthly dip, signal resilience.
– Steady growth in household credit shows consumer confidence.
– An expanding money supply and stronger bank liquidity reflect a healthy financial system.
– Stable interest rates provide a reliable environment for businesses and individuals.

While some sectors, particularly SMEs, are facing short-term contractions, the overall trajectory is positive — Eswatini’s economy is showing stability and gradual growth, even amid global and regional economic shifts.

( Courtesy Pic)