THE Reserve Bank’s gross gold and foreign exchange reserves increased by $562-million last month to $49.1-billion.
The bank has reported that the rise was due mainly to the maturing of foreign exchange swaps conducted for liquidity management purposes‚ as well as to the rise in the market price of gold‚ which was partially offset by the appreciation of the dollar against major currencies‚ as well as by foreign payments made on behalf of the Treasury.
The value of foreign exchange reserves increased by $529-million to $41.7-billion and gold reserves by $61-million to $4.8-billion.
The international liquidity position declined by $219-million to $42.7-billion mainly because of the $919-million drop in the forward position.
Nedbank economists predict that the country’s reserves are likely to come under pressure as the Reserve Bank is unlikely to accumulate more reserves owing to a firmer US dollar and weaker rand.
“Softer commodity prices will also ensure that reserves remain under pressure. In December‚ though‚ the market gold price increased to $1 198.90 from $1 183.84 in November,” they said. “The foreign exchange reserve data has few implications for markets in the short term.
“Recent inflation figures have surprised on the downside and the outlook for inflation has improved. At the same time, underlying local economic conditions remain weak.”
These factors should persuade the Reserve Bank’s monetary policy committee to keep interest rates on hold in the first half of the year‚ they said.