IMF cash boosts SA reserves

Johannesburg - South Africa received more than $2bn in funds from the International Monetary Fund in August, central bank data showed on Monday, driving its net reserves up 6.49% to $36.922bn.

The IMF transferred $2.166bn to Africa's biggest economy as part of a special drawing rights equivalent of $250bn earmarked for member countries to help deal with the global economic crisis.

The Reserve Bank said in a statement on its Web site that net reserves, known as the net liquidity position, climbed from $34.67bn in July.

Gross reserves were at $37.953bn in August from $35.747bn, with foreign currency holdings leaping $2.158bn to $34.156bn.

"The change in gold and foreign exchange reserves was mainly due to the general allocation of SDR 1.385 billion from the IMF, foreign exchange operations of the Bank and valuation adjustments," the central bank said.

The IMF money is allocated to member countries according to their quota, which is based on its relative size in the world economy. South Africa's quota is SDR 1.868 billion.

Analysts said the data showed the bank did not intervene in the market to boost reserves itself despite the rand currency remaining relatively strong against the dollar.

"Suffice to say that if you exclude the SDR there has been very little in terms of intervention," Gerorge Glynos, managing director of market analysts ETM, said.

The IMF agreed to disburse the funds after central banks in some countries pumped money into banking systems and markets to boost liquidity at the height of the financial crisis.

South Africa has not had to intervene to support local banks, which remained relatively stable through the turmoil, although the currency weakened sharply in late 2008 and equity markets fell, slowing the build up of reserves.

The central bank has been steadily building up holdings over the past 5 years after it brought a long-standing negative position into balance in 2004, but gross reserves still lag those in other emerging economies.

- Reuters