There has been a drop in car loans but an in­crease in bor­row­ing for re­al es­tate in­vest­ments ac­cord­ing to the Cen­tral Bank’s Mon­e­tary Pol­i­cy Com­mit­tee (MPC).

In its quar­ter­ly mon­e­tary pol­i­cy an­nounce­ment, is­sued yes­ter­day, the Cen­tral Bank said, “On the fi­nan­cial front, cred­it ex­tend­ed to the pri­vate sec­tor con­tin­ued to ex­pand ro­bust­ly. Pri­vate sec­tor cred­it from the con­sol­i­dat­ed fi­nan­cial sec­tor rose by 9.1 per cent (year-on-year) in April 2025. Busi­ness cred­it ex­pand­ed by 11.4 per cent, dri­ven by loans to the fi­nance and man­u­fac­tur­ing sec­tors.

“Con­sumer lend­ing grew by 10.8 per cent, while re­al es­tate mort­gage loans in­creased by 6.9 per cent. On the for­mer, there was slow­down in lend­ing for mo­tor ve­hi­cles, but a pick­up in cred­it for the pur­chase of land and re­al es­tate. Cred­it ex­pan­sion was sup­port­ed by am­ple do­mes­tic liq­uid­i­ty,” the an­nounce­ment said.

The re­port, how­ev­er, not­ed a dip in the liq­uid­i­ty in com­mer­cial banks, as it re­port­ed, “Com­mer­cial banks’ ex­cess re­serves at the Cen­tral Bank av­er­aged $6.6 bil­lion in May 2025, be­fore slip­ping to $5.3 bil­lion in ear­ly June.”

How­ev­er the sum­ma­ry clar­i­fied that those in­sti­tu­tions still en­joyed “am­ple do­mes­tic liq­uid­i­ty.”

The re­port said in­fla­tion was large­ly con­tained, al­though head­line in­fla­tion, as mea­sured by the Cen­tral Sta­tis­ti­cal Of­fice’s Con­sumer Price In­dex, rose to 1.4 per cent (year-on-year) in May 2025 from 0.7 per cent in Jan­u­ary 2025, (year-on-year).

The re­port stat­ed core in­fla­tion (which ex­cludes food prices) rose by 0.7 per cent, while food prices in­creased by 4.1 per cent in May.

The re­port said, “Food prices have been dri­ven by high­er prices for meat and for im­port­ed items such as but­ter, mar­garine and ed­i­ble oils. Mean­while, build­ing ma­te­r­i­al prices rose by 2.3 per cent (year-on-year) in the first quar­ter of 2025 com­pared with 2.5 per cent the pre­vi­ous quar­ter.”

Cit­ing da­ta from the Min­istry of En­er­gy, the Cen­tral Bank point­ed to a mixed per­for­mance in the en­er­gy sec­tor with a year-on-year re­duc­tion in the pro­duc­tion of nat­ur­al gas of -5.9 per cent dur­ing the first quar­ter of 2025, but a 6.1 per cent in­crease in the pro­duc­tion of crude oil.

The petro­chem­i­cal sec­tor re­port­ed ex­pan­sions in am­mo­nia (4.7 per cent) and urea (12.5 per cent), but a 15.3 per cent de­cline in methanol out­put.

“Mo­men­tum in the non-en­er­gy sec­tor ap­pears to be slow­ing, but over­all ac­tiv­i­ty re­mains pos­i­tive. In­di­ca­tors mon­i­tored by the Cen­tral Bank sug­gest that pos­i­tive per­for­mances in the man­u­fac­tur­ing, dis­tri­b­u­tion and fi­nance sec­tors were some­what off­set by slug­gish­ness in the con­struc­tion and util­i­ties sec­tors,” ac­cord­ing to the mon­e­tary pol­i­cy an­nounce­ment.

The MPC said it was mon­i­tor­ing glob­al events such as the re­cent con­flicts in the Mid­dle East but agreed to main­tain the re­po rate at 3.50 per cent.