Turnabout sweeps through banking sector

Excess liquidity: SOURCE ECONSULT
Excess liquidity: SOURCE ECONSULT

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 predisposed depositors.

The volte-face, which has gradually developed over the past three years, also looks set to reverse the role of the central bank in open market operations from liquidity absorption to provision.

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

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