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Banking deposits up $400m


Total banking sector deposits increased by $400 million in the month of August from July this year due to the increase in demand deposits, the African Development Bank (AfDB) said in its monthly review.

The deposits increased to $2,95 billion in August from $2,91.

Total banking deposits consist of demand deposits, savings, short-term deposits and long-term deposits while demand deposits are deposits that are received by the bank and can be withdrawn any time.

AfDB said demand deposits for the period stood at $110,5 million, indicating a 6,5% monthly change from July while long-term deposits were at $30,6 million.

“These increases were, however, offset by a decline of $96,2 million in savings and short-term deposits. Although long-term deposits increased in August 2011, the amounts remained small,” the monthly review said.

Demand deposits increased to $1,81 billion in August from $1,70 billion in July indicating 58,3% of total deposits.

Savings and short-term deposits stood at $0,89 million from $0,98 million in August 2011 representing a 33,8% to total banking deposits.

Long-term deposits were at $0,26 million representing 7,9% of the total banking sector deposits.

According to the report on a month-on-month basis, money supply growth increased to 1,6% in August from 0,3% in July 2011.

“Month-on-month money supply growth has remained unstable over the year.”

The AfDB said total banking sector deposits declined to 44,7% in August from 51,6% in July a development that is unfavorable given the prevailing liquidity constraints in an economy that is recovering.

On interest’s rates, AfDB said average commercial bank and merchant bank lending rates remained at a range of 16-30% and 16-32% respectively for the month of August.

It noted the weighted average base lending rates for commercial banks increased from 11% in July to 12,1% in August.

For merchant banks, the weighted base lending rates increased from 18,2% in July to 18,9% in August 2011.
The weighted average base lending rate refers to the sum of minimum nominal lending rates weighted by the individual banks’ loan book sizes.

Three-month deposit rates increased marginally from 11,3% in July to 11,9% in August 2011. Saving rates remained unchanged at 2,7%.

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