The value of South African assets abroad outstripped foreign investment into the country for the first time on record — thanks to the rand’s slump.
The difference between South African foreign assets and liabilities swung to a surplus of 113 billion rand ($7.2 billion) at the end of September from a deficit of 131 billion rand at the end of June, the central bank said in a statement on its website on Dec. 31. That’s the first positive reading since the Pretoria-based bank began recording the data at the end of 1956.
“The volatility and decline in domestic and global equity markets as well as the significant decline in the end-of-period exchange rate of the rand resulted in a respective modest decline in foreign liabilities and a substantial increase in South Africa’s foreign assets,” the Reserve Bank said.
The rand plunged 25 percent against the dollar last year, the worst performance after Brazil’s real among major currencies tracked by Bloomberg. The South African currency has been under pressure because of a slump in commodity prices, lackluster economic growth and rising interest rates in the U.S. It fell to a record low of 16.0543 against the dollar in December after President Jacob Zuma unexpectedly fired his finance minister.