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Cape Town - Total net foreign capital inflows into South Africa declined by 4% in the first half of this year, relative to the same period in 2012, Finance Minister Pravin Gordhan said on Wednesday.
In his 2013 mini budget statement, tabled in parliament, he said net purchases of bonds by international investors declined from R76bn over the first nine months of 2012, to R37bn over the same period this year.
Net purchases of equities reversed, from an outflow of R5bn to an inflow of R26bn. Weaker inflows reflected a pullback from emerging markets and concerns about the domestic economy.
South Africa recorded R16.9bn worth of net foreign direct investment in the first half of 2013, consisting largely of long-term loan financing extended by international firms to their domestic subsidiaries.
The most recent Global Competitiveness Report, which evaluated the business operating environment and competitiveness of 148 countries, ranked South Africa 53rd, making it the second-most competitive country in sub-Saharan Africa, after Mauritius, ranked 45th.
The rand’s exchange value declined from R8.79 to the United States dollar in January this year, to R9.98 in September.
During the third quarter, uncertainty surrounding the timing and pace of the reduction in the US monetary stimulus took a toll on the rand and other emerging-market currencies.
The real effective exchange rate had depreciated by 11.7% over the year up to July.
The weaker real value was expected to support mining and manufacturing exports, provided the depreciation was sustained. This required low and stable levels of inflation.
