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Johannesburg - The value of South African assets abroad outstripped foreign investment into the country for the first time on record - thanks to the rand’s slump.
The difference between South African foreign assets and liabilities swung to a surplus of R113bn ($7.2bn) at the end of September from a deficit of R131bn at the end of June, the central bank said in a statement on its website on December 31. That’s the first positive reading since the Pretoria-based bank began recording the data at the end of 1956.
“The volatility and decline in domestic and global equity markets as well as the significant decline in the end-of-period exchange rate of the rand resulted in a respective modest decline in foreign liabilities and a substantial increase in South Africa’s foreign assets,” the Reserve Bank said.
The rand plunged 25% against the dollar last year, the worst performance after Brazil’s real among major currencies tracked by Bloomberg. The South African currency has been under pressure because of a slump in commodity prices, lackluster economic growth and rising interest rates in the US. It fell to a record low of R6.0543 against the dollar in December after President Jacob Zuma unexpectedly fired his finance minister.
