Share

SA's forex reserves lower

Johannesburg - South Africa’s international liquidity position fell more than expected in November as gross reserves decreased on a stronger dollar against major currencies, causing a decline in foreign currency reserves.

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.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.97
-0.2%
Rand - Pound
24.13
-0.1%
Rand - Euro
20.63
-0.2%
Rand - Aus dollar
12.38
+0.3%
Rand - Yen
0.13
+0.4%
Platinum
911.88
-1.3%
Palladium
1,019.74
-4.3%
Gold
2,159.99
-0.0%
Silver
25.11
+0.3%
Brent Crude
86.89
+1.8%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders