RESERVE

12 May 2016 By PDSNET

(1) A figure from the liabilities side of the balance sheet, which is money ploughed back into the business out of profits, arising from a revaluation of assets, or money set aside for the redemption of debentures or other long-term loans.

(2) The gross gold and foreign exchange reserves of the government published every month. For example, in January 2024 the Reserve Bank reported that reserves were $62,5bn at the end of December 2023 - up from November's $61,72bn, mainly due to an increase in the US dollar price of gold and an increase in foreign currency reserves. The reserves play an important role in stabilising the value of the rand against other currencies, especially the US dollar. At the start of 2024 there was pressure on the Treasury to use the increase in reserves to reduce the government's deficit. In his budget policy statement at the end of February 2024 the Minister of Finance, Enoch Godongwana was expected to indicate how the Treasury might use the foreign exchange reserves to alleviate the government's difficult debt position. Clearly any reduction in those reserves would have a negative impact on the rand. 



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