The Central Bank of Eswatini has reported a decline in private sector credit, a drop in gross official reserves and tighter banking sector liquidity for May and June 2026, according to its Monthly Statistical Release.
The data also shows a sharp increase in net claims on government and a month-on-month contraction in broad money supply, even as year-on-year growth remained positive across several monetary indicators.
Credit extended to other sectors of the domestic economy declined for the third consecutive month in May 2026. 
The total stood at E903.2 million, representing a 0.2 per cent decrease month-on-month and an 11.6 per cent decline year-on-year.
According to the Central Bank, the contraction was driven by reduced lending to other financial corporations, which fell by 0.5 per cent to E420.0 million and to public enterprises, where credit decreased by 0.1 per cent to E399.4 million.
Credit to local government was the only category to record growth, rising by 0.7 per cent to E83.9 million.
The persistent decline in credit to the private sector reflects reduced borrowing activity and could have implications for investment and economic growth in the coming months.
Net claims on government more than doubled in May 2026. The figure increased from E1.0 billion in April to E2.1 billion.
The Central Bank attributed the increase primarily to a 14.3 per cent rise in claims on government to E8.4 billion. The rise followed an advance from the Central Bank to government during the review period.
Government deposits also increased, but at a slower pace. They grew by 0.3 per cent to E6.4 billion in May.
The sharp rise in net claims indicates increased government reliance on domestic financing sources to meet expenditure needs.
Broad money supply, M2, amounted to E26.5 billion in May 2026.
This represented a 0.7 per cent decline from April 2026. On an annual basis, however, M2 grew by 11.3 per cent.
The month-on-month reduction was attributed to contractions in both narrow money supply, M1 and quasi money supply.
M1 contracted by 1.2 per cent month-on-month to E10.1 billion. The decline was driven by a 1.6 per cent fall in transferable demand deposits to E9.1 billion.
Emalangeni in circulation increased by 2.3 per cent to E951.4 million during the month.
Quasi money supply stood at E16.4 billion in May, reflecting a 0.3 per cent month-on-month decline.
Year-on-year, quasi money grew by 11.8 per cent.
The monthly decrease reflected declines in savings deposits, which fell by 0.6 per cent to E2.3 billion, and time deposits, which declined by 0.3 per cent to E14.2 billion.
Total deposits held with Other Depository Corporations stood at E28.27 billion in May 2026, down from E28.47 billion in April but higher than E24.81 billion recorded in May 2025.
