South Africa’s economy witnessed an unexpected growth in the first full working week of the new year as gross reserves grew by $425 million from $50.297 billion to $50.722, beating market expectations of $48.84 billion.
Foreign exchange reserve increased from $42.689 billion in November $42.927 billion in December, as stated by the country’s Reserve Bank early today.
Asides, the $344 million growth in foreign exchange reserves, foreign currency deposits received reduced from $9.340 billion to $8.991 billion, while forward position which signifies unsettled transactions declined from 1.737 billion to $1.196 billion, bringing South Africa’s international liquidity position to $42.927 billion compared to previous month $42.689 billion.
The improvement in the international liquidity position can be attributed to gains in gross reserves, the forward position and the change in the foreign currency deposits received.
Within a five-year period, the increase in gross reserves is the highest amount since January 2013, an effect of matured foreign exchange swaps conducted for liquidity management, depreciation of the US dollar against most currencies and increase in the US dollar gold price, which were in part an offset of foreign exchange payments made on behalf of the government.