RBM Q3 resources expand 14%
The Reserve Bank of Malawi (RBM) resources grew by 14 percent to K394.6 billion in third quarter (Q3) of 2013 from K346.1 billion recorded in the previous quarter, a recent report has indicated.
The RBM’s Q3 Financial and Economic Report has attributed the expansion to the bulk of resources which were generated through transactions in repurchase agreements (Repos), which resulted in un-sectored liabilities growing by K15.9 billion.
The report said that commercial banks’ deposits contributed K14.7 billion to the RBM resources, whereas deposits of the official sector and non-residents added K12.9 billion and K11.5 billion to the RBM resource envelope respectively.
Recently, the RBM said it will further tighten the monetary policy to address challenges due to delayed disbursements by the country’s major donors through the use of open market operations, bank rate and foreign exchange operations.
Earlier, the RBM noted that the open market operations are an intensification of the RBM’s tight monetary policy to achieve end-March and end-June liquidity targets.
The central bank’s spokesperson Mbane Ngwira earlier said that the RBM has opted for the use of Repos because the market has an appetite for them in contrast to outright sale and that they are less likely to affect interest rates.
The report, however, noted that the currency outside the RBM declined by K5.6 billion which was due to the closure of the main agricultural produce markets during the quarter.
It said it utilised the bulk of the accumulated resources to extend credit to the central government in form of advances.
Investments in foreign banks, particularly term deposits, also increased by K11.7 billion while outstanding claims on the commercial banks dropped by K6.4 billion in the third quarter of 2013, which was complemented by a reduction of K5.1 billion in un-sectored assets.
In 2012, the central bank whose capital according to RBM Act is exclusively held by the government realised a comprehensive total loss of about K33.5 billion, down from a K4.4 billion profit before foreign exchange revaluations.
