Nedbank: SA Reserves

07 Jun.

Nedbank Economic Commentary: Reserves – May 2011.

International liquidity falls mainly on lower foreign currency holdings and a lower gold price.

• The international liquidity position dropped to $45 864 million in May from $46 039 million in April.
• A weaker US dollar and a slightly lower gold price reduced the value of gross gold and foreign exchange reserves to $50 119 million from $50 602 million
• The Reserve Bank is likely to continue to accumulate foreign exchange reserves in order to reduce some of the upward pressure on the rand. Governor Gill Marcus recently announced that the Bank bought around R54 billion of foreign currency reserves over the past year.
• These figures have little direct implication for monetary policy. We expect interest rates to remain unchanged until early 2012.

Comment

The international liquidity position dropped to $45 864 million in May from $46 039 million in April as foreign currency holdings fell during the month.

Gross foreign exchange reserves dropped to $50 119 million, dragged down by lower foreign currency holdings and a slightly lower gold price.

The gold price was slightly lower at $1 535,38 per ounce from $1 537,50.

The US dollar was firmer at $1,4388 against the euro from $1,4861 and firmed marginally to $1,6493 against the British pound from $1,6657. The rand dropped to R6,8604 against the US dollar from R6,5924. …

See the full Commentary

Also see the SA Reserve Bank Information Notice