TUESDAY, 11.00AM
LATEST Reserve Bank figures show foreign capital flowed into SA like never before in May, boosting the Bank’s gold and foreign exchange reserves by R7,4-billion to an all-time high of R21,8-billion.
The massive inflows, which came a month before the lifting of foreign exchange controls, were much bigger than anyone had forecast, even exceeding the R5,6-billion from Telkom’s partial privatisation. The healthy figure was boosted by continuing international demand for SA bonds and equities.
The figures would have been even better, but the Reserve Bank used R700-million of the inflows to repay some of its foreign debt, bringing total use of offshore credit lines down to R1,8-billion from April’s R2,5-billion.
The comfortable reserves position sets the scene for an easy lifting of exchange controls next month, and may even prompt government to relax controls more than originally planned. The solid reserves position is also expected to have a positive effect on the prospects for an early drop in interest rates.
Meanwhile, foreigners invested a net R782-million on the Johannesburg Stock Exchange last week. Bonds, however, showed a net outflow of R560-million.