SA’s gross reserves dipped $805m to $47bn in November, according to data from the South African Reserve Bank. The decrease in gross reserves reflected the decline in the gold price, the strong dollar and foreign exchange payments made on behalf of the government. The gold price declined 6.96% to $1.185.74/oz during November, hit by prospect of higher US interest rates. Foreign exchange reserves are an important indicator of a country’s ability to repay foreign debt in the short term and are used for currency defence. Reserves are also taken into account when determining a country’s credit rating. The country recently managed to maintain its investment-grade status with all three major agencies. The international liquidity position (ILP) dropped $722m to $41.08bn in November from $41.80bn in October. The decline in the international liquidity position reflected the decline in the gross reserves and the forward position.
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