SA reserves low, inflation on track

PRETORIA – South Africa’s levels of reserves were probably “still a bit on the low” side but the central bank would continue to build them at a moderate pace, deputy governor Ian Plenderleith said yesterday.

Another Reserve Bank official also said the economy was set to grow “handsomely” and that the bank saw the CPIX targeted measure of inflation to peak in the first quarter of next year but stay in its three-to-six per cent target range. They were speaking at a presentation on the central bank’s annual financial statement.”We are in a much more satisfactory position now than a year ago but are probably generally still a bit on the low side by the ratios of other countries at our stage of development,” Plenderleith said.”Therefore, we will continue to moderately add to reserves as and when the opportunity presents itself,” he said.The central bank has repeatedly said it would buy dollars in the market cautiously, to avoid affecting the value of the rand.South Africa’s net gold and foreign exchange reserves jumped by nearly US$1,5 billion (N$9,9 billion) to US$15,176 billion during June, boosted in part by inflows of foreign direct investment.Plenderleith said the central bank did not have a fixed target for its reserves as the aim was to ensure that South Africa was broadly in line with its peers.The bank’s head of research Monde Mnyande said the economy was set to grow “handsomely” and saw the CPIX targeted measure of inflation to peak in the first quarter of next year but stay in its three-to-six per cent target range.-Nampa-ReutersThey were speaking at a presentation on the central bank’s annual financial statement.”We are in a much more satisfactory position now than a year ago but are probably generally still a bit on the low side by the ratios of other countries at our stage of development,” Plenderleith said.”Therefore, we will continue to moderately add to reserves as and when the opportunity presents itself,” he said.The central bank has repeatedly said it would buy dollars in the market cautiously, to avoid affecting the value of the rand.South Africa’s net gold and foreign exchange reserves jumped by nearly US$1,5 billion (N$9,9 billion) to US$15,176 billion during June, boosted in part by inflows of foreign direct investment.Plenderleith said the central bank did not have a fixed target for its reserves as the aim was to ensure that South Africa was broadly in line with its peers.The bank’s head of research Monde Mnyande said the economy was set to grow “handsomely” and saw the CPIX targeted measure of inflation to peak in the first quarter of next year but stay in its three-to-six per cent target range.-Nampa-Reuters