The Central Bank, in its Monthly Economic and Financial Developments Report for October, noted that the contraction in external reserves slowed notably.
The regulator stated, “Contributing to this outturn, the Central Bank’s foreign currency transactions with the public sector switched to a net purchase of $18.6 million, from a net sale of $19.4 million in 2023. In addition, the Bank’s net foreign currency outflows to commercial banks tapered to $34.6 million from $77.7 million last year, as commercial banks’ net sales to their customers narrowed to $31.9 million from $64.1 million in the preceding year.”
Provisional data on foreign currency sales for current account transactions showed a $274.9 million decline in monthly outflows, totaling $512.6 million compared to the same period in 2023.
The Central Bank added, “Leading this outcome, payments for ‘other’ current items—primarily credit and debit card-financed imports—declined by $166.0 million, and oil imports by $105.2 million. Further, outflows reduced for factor income payments by $21.0 million and travel-related transactions by $1.7 million. Conversely, payments for non-oil imports rose by $17.3 million and transfer payments by $1.7 million.”
The report also highlighted a slight improvement in commercial banks’ credit quality indicators during October, despite an increase in short-term arrears. Total private sector arrears increased by $1.3 million (0.3 percent) to $485.4 million. However, the arrears ratio fell by 5 basis points to 8.6 percent of total private sector loans, reflecting a reduction in non-performing loans (NPLs).
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