Bank loans in ‘Fresh’
double to $553 million

Lending restricted to bank clients

Bank loans in ‘fresh dollar’ almost doubled from $282 million in October 2023 to $553 million in June 2025, according to the Central Bank’s (BDL) Macroeconomic Review. Most of them are small personal loans.

BDL said that banks require borrowers to have a steady income in US dollar within the same financial institution, effectively excluding large segments of the population and many businesses from access to credit. Even for eligible borrowers, interest rates remained extremely high, reflecting elevated risk and the banks’ weakened balance sheet.

Deposits in ‘fresh dollar’ increased to $4.4 billion at the end of June 2025 but around half of this amount ($2.2 billion) consists of outstanding balances under Circulars 158 and 166. “Excluding these restricted funds, the stock of genuinely liquid, fully usable fresh deposits is closer to $2.2 billion, nearly unchanged from 2021 levels,” the Central Bank said.

But even these liquid fresh deposits cannot be used to create domestic credit because the banks must fully provision these funds by holding equivalent balances in their branches or with correspondent banks abroad to ensure immediate depositor access. “Consequently, these deposits have no multiplier effect and cannot support lending, investment, or broader financial intermediation. Their role is largely limited to personal consumption or external payments.”

BDL said: “Without a comprehensive restructuring of the banking sector, including a credible resolution for depositors’ repayments and a recapitalization of banks, lending will remain constrained and the financial system will not be able to play its normal role in the economic recovery.”