Forex reserves slip in August
Mon, 08 Sep 2008
The South African Reserve Bank accumulated foreign exchange reserves at a slower pace in August, the Nedbank Group's economic unit said on Friday.
"This was mainly due to a sharp decline in gold reserves, while a weaker rand-dollar also contributed," Nedbank said.
Earlier the central bank said that the country's net gold and foreign exchange reserves dropped at the end of August to $33.5-billion from $34.171-billion at the end of July.
Gross reserves decreased to $34.332-billion in August from $35.004-billion in July.
Net foreign currency holdings dropped to $31.002-billion from $31.338-billion previously.
Due to a steep fall in the price of gold, the country's gold reserves decreased to $3.33-billion from $3.666-billion before.
Nedbank said that the pace of reserves accumulation would mainly be determined by the developments in the global markets in the months ahead.
"Weaker global growth and a steadier dollar may increase risk aversion, which would probably result in slower reserve accumulation."
Nedbank added that reserves were unlikely to have a bearing on the Reserve Bank's macroeconomic policy.
"The Monetary Policy Committee's main focus will remain on inflation and consumer credit demand," it said.
Recent indicators showed a slowdown in credit growth and inflation appeared to have reached a peak in July.
"This and other evidence of slowing economic activity should convince the MPC to keep rates on hold for the remainder of the year."
Sapa
