The reasons the IMF approved SA’s request for a R70bn loan deserve more attention than the seemingly favourable terms on which it is being offered. The letter of intent foresees that there’ll be a rapid rise in demand for foreign exchange due to shifts in portfolio flows (and maybe a rise in import requirements). But is such a situation likely?

The June release of selected data by the Reserve Bank indicated that SA had gross dollar reserves of $52.8bn, about seven months’ import cover. This is important, as our economy relies on imports of fuel, machinery, pharmaceuticals and other goods to function. Yet as data released by the SA Revenue Service (Sars) last week showed, imports slowed 18.9% in May...