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
BPF should get house in order

Speaker of the National Assembly, Dithapelo Keorapetse, has this week rightly washed his hands of the mess, refusing to wade into a party squabble that has no clear leadership and no single version of the truth.When a single party sends six different letters to the Speaker’s office, each claiming to be the authoritative voice, it is not just confusion, but an embarrassment.Keorapetse is correct to insist on institutional boundaries. Parliament...

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