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Johannesburg - South Africa's net gold and foreign exchange reserves rose significantly in March, suggesting the central bank used the opportunity of a stronger rand during the month currency to boost its reserves.
Data posted on the central bank's website showed net reserves, also called the international liquidity position, rose by $307m to $33.458bn at the end of March from $33.151bn in February.
Gross reserves stood at $34.108bn in March, up from $33.779bn, while net foreign currency holdings rose $444bn to $30.403bn. Gold reserves fell by $115m to $3.705bn.
The bank attributed the rise in reserves to "usual foreign exchange operations" and valuation adjustments. Central bank data showed the rand had strengthened to R9.4950 against the dollar in March from R10.05 in February.
"The rand was much stronger over the time, and obviously it did afford the opportunity to buy dollars. It could also possibly have been a (firmer) gold price," said Mandla Maleka, chief economist at Eskom.
"Probably next month they may come back strongly because at these levels of the rand it is cheaper to secure dollars," Maleka added.
South Africa's net reserves have risen over the past five years, after the central bank brought a long-standing negative position into balance in 2004 with the elimination of its loss-making forward foreign exchange book. Its reserves, however, still lag those of other emerging economies.
- Reuters