South African Reserves Decline 0.2% as Gold Price Drops

South Africa’s gold and foreign- currency reserves dropped for a second time in three months in December as the price of the metal fell.

Gross reserves declined 0.2 percent to $50.7 billion, the Pretoria-based Reserve Bank said on its website today. The median estimate in a Bloomberg survey of three analysts was $50.95 billion. Net reserves slid to $48 billion from $48.43 billion.

“The decrease in the gross reserves was primarily due to the decline in the U.S. dollar gold price which was partially off-set by the settlement of maturing foreign exchange swap transactions,” the bank said.

Gold reserves fell by $252 million to $6.7 billion in the month. The price of bullion dropped 2.3 percent to as low as $1,635.70 an ounce in London in December.

The central bank has been buying foreign currency to bolster reserves and help moderate swings in the value of the rand. After dropping to 9 per dollar in November, the lowest level in more than three years, the rand surged 5.1 percent against the U.S. currency in December. It fell 0.2 percent to 8.5825 per dollar by 9:32 a.m. in Johannesburg.

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net