SA’s net foreign reserves dip

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South Africa’s net foreign reserves fell slightly in August to $40.795bn from $40.901bn the previous month, the South African Reserve Bank (Sarb) said on Wednesday.

Gross reserves also declined to $45.708bn from $46.157.

Sarb said the official gold and foreign exchange reserves and the international liquidity position decreased by $450m and $107m to $45.7bn and $40.8bn respectively.

The decrease in gross reserves was mainly due to the decline in the dollar gold price and foreign exchange payments made on behalf of the government.

The decrease in the international liquidity position was due to the fall in gross reserves, which was substantially offset by the change in the foreign currency deposits received and the increase in the forward position.

Nedbank’s economic unit commented in reaction to the latest figures that the decline in gross reserves mainly reflected a drop in foreign exchange reserves on the back of a government foreign currency payment.

“The level of reserves is unlikely to change significantly in the short term as Sarb’s ability to accumulate will be limited by high market volatility and unfavourable growth prospects,” said Nedbank.

It pointed out that gross reserves figures have little direct imact on monetary policy in the short term.