South Africa Gross Reserves Gain First Time in Four Month
South Africa’s gold and foreign currency reserves climbed for the first time in four months as the price of bullion rose and the dollar weakened, boosting the value of reserves in euro and other currencies.
Gross reserves gained 0.6 percent to $49.2 billion in June, the Pretoria-based Reserve Bank said on its website today. Net reserves advanced to $47.9 billion from $47.7 billion.
“The increase in gross reserves was primarily due to valuation adjustments emanating from the higher U.S. dollar gold price and depreciation of the U.S. dollar against other major currencies,” the bank said in the statement.
The dollar dropped against 14 of the 16 major currencies tracked by Bloomberg in June, while the price of gold rose 2.4 percent last month, the first increase in five months. The central bank holds most of its reserves in euros, dollars and pounds.
The Reserve Bank said on July 4 it posted the third consecutive annual loss in the year through March because of the cost of building reserves. The bank earns a lower return on its foreign-currency holdings than it pays on domestic bonds it buys, resulting in a loss.
Gold reserves rose 1.7 percent to $6.4 billion in June, accounting for 13 percent of gross reserves.
The rand was at 8.1833 against the dollar as of 9:02 a.m. in Johannesburg from 8.1572 before the data was released.
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