/ 2 December 1997

Shock decline in reserves

MONDAY, 11.00PM:

GROSS gold and foreign exchange reserves held by the South African Reserve Bank made a surprise fall in November, dropping R800-million in November to R26,5-billion, according to provisional figures published by the Reserve Bank on Monday.

The figure had been expected, following October’s stock exchange crisis when the bank had to step in to defend the rand, and when foreign investors fled from emerging markets such as South Africa. The weak gold price also hurt the bank’s reserves.

The Bank said the utilisation of foreign credit lines stood at R9,9-billion at the end of last month, which meant that R1,2-billion had been drawn to top up reserves in October. The amount of credit used in October was at a record high.