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ESP to boost banks� liquidity � IMF

ESP projects are expected to inject up to P3 billion into the economy in the next two years PIC: MORERI SEJAKGOMO
ESP projects are expected to inject up to P3 billion into the economy in the next two years PIC: MORERI SEJAKGOMO

The International Monetary Fund (IMF) believes that the drawdown on government deposits to stimulate the economy is expected to help banks liquidity positions and consequently boost credit growth.

The institution’s optimism, however, seems to go against the current outlook, with interest rates being at record low levels since 2015 and credit growth declining as commercial banks adopted a cautious approach to lending in the context of slow growth in customer deposits and increasing competition to raise funds.

In a Botswana report published recently, the IMF said the change in fiscal policy is expected to enhance monetary policy transmission by releasing commercial banks’ liquidity constraints through increased deposits in this way supporting domestic demand.

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Editor's Comment
Celebrate responsibly, put safety first this holiday

“Safety first is safety always”– Charles M HayesAs most people begin travelling across the country to spend the President’s Holidays with family and friends, there is every reason to embrace the joy and togetherness that this period brings.While holiday periods bring joy, they are sadly often accompanied by a rise in road accidents, violent incidents and other avoidable tragedies. Too often, families that set out to celebrate together end...

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