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.

Editor's Comment
The Boko-led administration has to tread carefully

‘When you make peace withyourself, you make peace with the world’- Maha GhosanandaThis may come at a huge cost if not handled properly. What started off on Labour Day in Letlhakane this year, where Boko was in attendance when the militant lawyer-cum-trade unionist, Robert Rabasimane rebutted the President’s address in defence of the trade union has seemingly spiralled out of control. The issue is now creating a cat-and-mouse type of a...

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