NASSAU, BAHAMAS- The Bahamian banking system’s liquidity and external reserves strengthened significantly in April, even as domestic credit growth slowed sharply and private sector lending contracted.
According to the Central Bank’s latest monetary data, excess reserves—a narrow measure of banking sector liquidity—increased by $72.5 million to $2.05 billion during the month. The gain marked a reversal from a $27.8 million decline recorded during the same period last year.
Meanwhile, excess liquid assets, a broader measure of liquidity, rose by $128.8 million to $3.44 billion, extending the $36.7 million increase recorded in April 2025.
The Central Bank also reported a substantial boost in external reserves, which expanded by $133.5 million to $3.22 billion. The increase far exceeded the $29.4 million accumulation recorded during the same month last year.
The growth was driven largely by stronger foreign currency inflows. The Central Bank’s net purchases from commercial banks widened to $146.1 million from $29.1 million a year earlier, while commercial banks’ net intake from customers increased to $166.8 million from $21.3 million.
Despite the gains in liquidity and reserves, growth in Bahamian dollar credit slowed dramatically. Total domestic credit expanded by just $1.8 million in April, compared to $89.1 million during the same month in 2025.
A key factor was slower government borrowing, with the expansion in net claims on the Government moderating to $19.8 million from $79.8 million a year earlier.
Private sector credit contracted by $17.5 million, reversing a $13.4 million increase recorded in April 2025. Commercial lending accounted for most of the decline, falling by $35.8 million and extending the previous year’s $4.8 million reduction.
Consumer lending continued to grow, although at a slower pace, increasing by $12.7 million compared to $17.6 million in the prior year. Mortgage lending showed stronger momentum, with gains accelerating to $5.5 million from just $600,000 in April 2025.
Meanwhile, foreign currency sales for current account transactions rose by $52.6 million year-over-year to $639.5 million. The increase reflected higher payments for oil imports, non-oil imports, debit and credit card transactions, and factor income remittances.
