SA's forex reserves lower

The SA Reserve Bank (Sarb) said on Wednesday net gold and foreign exchange reserves fell to $48.633bn in November from $49.221bn in October, also as the forward position of the bank declines.

A Reuters poll showed the market was expecting net reserves to fall to $49.05bn in October.

A stronger dollar weakened the value of foreign currency-denominated assets held by South Africa.

Analysts don’t believe the bank was actively accumulating reserves in November as that would increase the volatility of the rand.

“If the central bank is sensitive to the volatility in the currency, they’re not going to want to exaggerate that volatility by getting involved in the market,” said George Glynos, an analyst at research house ETM.

“That would just make matters worse so they tend not to intervene at all when the currency is fluctuating.”

The rand has fallen 20% against the dollar so far this year, impacted by risk aversion from the eurozone debt crisis, and hit a two-and-a-half year low of R8.61 in November.

It was trading at R7.96 against the dollar on Tuesday, off the session low of R8.0407.

The Reserve Bank has said limiting the rand's gyration was out of its hands, as the currency is traded heavily in global markets.

The government also withdrew $156m of its deposits at the Sarb, which decreases foreign currency deposits.

The Treasury has said it will draw on its cash balances at the Reserve Bank to help plug a wider budget deficit, instead of borrowing more.