South Africa’s net gold and foreign exchange reserves increased slightly to $27,449-billion in August, data showed on Friday, as the softer rand currency slowed the pace of reserves build-up.
The figure rose from $26,965-billion at the end of July.
Reserve Bank figures posted on its website showed gross reserves ticking slightly up to $29,836-billion from $29,334-billion in the previous month.
Analysts said the numbers were in line with expectations, but the rate of purchase was lower than in July due to the weaker rand in the month.
”The lower build-up was a function of a weaker rand in August, but the outlook is still positive. The SARB will continue to accumulate reserves when rand is firmer,” said Monale Ratsoma, macro strategist at Absa Capital.
August was a volatile month for the rand, which gyrated widely in the face of global market turmoil stemming from United States credit market problems. It touched 7,60/dollar, its weakest level since early November.
The data showed that total gold and foreign assets were higher at R212,637-billion, while foreign currency reserves rose by $479-million to $27,147-billion during the month.
South Africa brought a long-standing negative position in reserves into balance early in 2004 with the elimination of its loss-making forward foreign exchange book, historically the Achilles’ heel of the currency.
Since then it has gradually increased net reserves — also known as the international liquidity position — although the total still lags comparable emerging markets.
The International Monetary Fund said in its annual country report last month that South Africa needed to continue with its prudent fiscal and monetary policies in order to improve its external vulnerability. – Reuters