Banks not in foreign currency crunch - BAN

The Bankers Association of Namibia (BAN) has rejected claims that the country’s commercial lenders are running out of foreign currency cash. BAN chairperson Lionel Matthews at the weekend addressed what he said were concerns from local market players about especially US dollars that appeared to be running low of late. “The issue is rather that the availability of specific denominations of US dollar notes being requested by our respective customers has come under strain as a consequence of customer-specific preferences,” Matthews said. Complaints from the public cited ongoing warnings from the central bank against Namibia’s rising trade deficit, which amounted to N$9.85 billion in 2015’s second quarter. The trade deficit is the result of the country’s import costs outweighing its export earnings, and implies a drop in Namibia’s stock of foreign currency reserves used to back its liabilities. “Our country’s commercial banks have sufficient foreign exchange cash, including US dollars, to adequately meet the demand,” Matthews said. He explained that commercial banks typically maintain sufficient stock levels of foreign currency based on the expected demand, and that keeping excess stock levels would be considered impractical and inefficient from a cost perspective. Matthews, also the Managing Director of Nedbank Namibia, thus advised bank customers to provide their particular financial institutions with prior notification wherever they expect transactions to involve significant amounts of foreign currency. BAN members, he said, as representatives of the banking industry, are currently in discussion with the Bank of Namibia (BoN) to address the current challenge. WINDHOEK DENVER ISAACS