South Africa’s foreign exchange reserves narrowed in July, reaching more than four-and-a-half year low levels, as the US dollar strengthened during the month, while gold prices fell, central bank data showed.
The gross gold and foreign exchange reserves shrank 2.1% m/m to $45.8bn, their lowest level since January 2011, following a 0.8% m/m growth in June. The South African Reserve Bank (SARB) attributed the decline to the appreciation of the dollar against major currencies, the fall in the dollar gold price and an increase in foreign exchange swaps conducted for liquidity management services.
South Africa’s international liquidity position (ILP), which represents its net forex reserves, fell 1.4% m/m to $41bn at end-July, the worst reading since September 2010, reversing a 0.2% m/m rise in June. The decrease was caused mainly by the drop in gross reserves, partly offset by a 2.2% fall in the received foreign currency deposits and an 11.1% increase in the forward position, which represents SARB’s unsettled spot or swap transactions.
The y/y drop in gross reserves deepened to 8.2% last month from 3.7% in June, and that in net reserves widened to 7.5% from 7.2%.
| $mn | Jul-15 | Jun-15 | m/m change |
| Gold reserves | 4 370 | 4 718 | -7.4% |
| SDR holdings | 2 494 | 2 515 | -0.8% |
| Foreign exchange reserves | 38 959 | 39 597 | -1.6% |
| Gross reserves | 45 823 | 46 829 | -2.1% |
| Foreign currency deposits received | -7 368 | -7 537 | -2.2% |
| Forward position | 2 553 | 2 298 | 11.1% |
| International liquidity position | 41 007 | 41 590 | -1.4% |
| Source: SARB |
Related Articles
Ghana emerges as global leader in digital currency and blockchain innovation
Ghana has quietly surged into the top ranks of global cryptocurrency adoption, transforming from a heavily restricted market just three years ago into one of Africa’s most forward-leaning digital ... more
Ghana’s oil output stalls despite near-record production, PIAC warns of sectoral decline
Ghana narrowly missed matching its 2023 crude oil output by just 0.01%, equivalent to 7,000 barrels, according to the latest annual report by the Public Interest and Accountability Committee (PIAC). ... ... more
RareX and Iluka lodge joint bid for Kenya’s Mrima Hill critical minerals project
ASX-listed RareX has formed a consortium with fellow Australian miner Iluka Resources to bid for the exploration and development of Kenya’s Mrima Hill project, the company announced on ... more