Mohohlo dispels liquidity crisis concerns

Mohohlo said contrary to perceptions, the liquidity in the banking system is not tight, adding that there is excess liquidity in the banking system which currently stands at approximately P3billion Pula.  Mohohlo said this means banks continue to hold excess investable funds over and above the statutory liquid assets requirement. Economists recently pointed out that a new era is dawning in Botswana’s banking sector with an emerging shortage of deposits and liquidity coupled with reduced profitability looking set to bring back the balance of power to the feeble depositors and savers.

Before 2010, the banking sector has been characterised by excess liquidity, super normal profits and low deposits rates, making savings unattractive.