SARAH BULLEN in Johannesburg | Tuesday 12.30pm.
SOUTH Africa’s gold and foreign exchange reserves fell 2,4%, R800-million,to R32,60-billion in July from R33,40-billion in June, the Reserve Bank said on Tuesday.
The Bank released preliminary reserves figures in advance of more detailed data on its holdings of gold and foreign currencies, scheduled for August 11.
ING Barings chief economist Christina Quattek said the figures are largely in line with expectations, as it would have been urealistic to expect an improvement in foreign exchange reserves in the continuing climate of instability. The central bank said its net oversold foreign exchange open position eased to $25,20-billion at the end of July, from a revised figure of $25,30-billion in June. The Bank previously stated its net forward oversold position at the end of June as $22,50-billion. The rand lost some ground on the news of such a large upward revision in the net forward oversold position — which widens the potential liability on the Reserve Bank’s own fragile gold and foreign exchange reserves.
The utilisation of foreign credit lines at the end of July 1998 amounted to R18,5-billion compared to R17,0-billion at the end of June 1998. The central bank noted that it spent almost the entire month of July out of the spot foreign exchange, last intervening July 3.