SA Reserve Bank has over R1 trillion in assets

The South African Reserve Bank (SARB) reported today that its total assets increased by R201 billion in the 2022/23 financial year, bringing its total assets to R1.2 trillion.

This is a significant increase compared to the previous year when the SARB’s total assets were R962.8 billion.

In its latest financial results, the SARB ascribes this large jump in assets to “increases in gold and foreign exchange reserves of R251 billion, offset by a decrease in accommodation to banks of R47 billion”.

Gold and foreign exchange reserves comprised the most significant portion of the SARB’s assets, increasing from R842.84 billion in 2021/22 to R1.09 trillion in 2022/23.

The SARB’s total assets are still significantly smaller than the major central banks worldwide. For example, according to the Sovereign Wealth Fund Institute, the US Federal Reserve has more than $8.3 trillion in assets.

Central banks worldwide have been stocking up on gold in 2022 and 2023. In 2022, particularly in H2, central banks doubled their gold purchases compared to the purchase rate over the last decade. 

This trend has continued in Q1 2023. Market Strategist at the World Gold Council, Joseph Cavatoni, estimated that around 228 tons had been bought by central banks in this quarter, mainly by China, Singapore, and Turkey.

This is driven by central banks seeing diversification benefits and “dealing with their concerns around inflation”, he said.

The SARB reported increasing its gold coin and bullion reserves from 4,029,765 fine ounces to 4,031,923 fine ounces, or by around R540.73 million, which brought its total gold assets to R141.89 billion.

Foreign exchange reserves across the world decreased in 2022. According to the  International Monetary Fund’s Currency Composition of Foreign Exchange Reserves data, foreign exchange reserves fell from USD$12.92 trillion in Q4 2021 to USD$11,96 trillion in Q4 2022.

However, the SARB significantly increased its foreign exchange reserves in 2022/23, particularly its US dollars. 

At the end of 2021/22, the SARB held R467.15 billion in USD, which comprised 47.7% of its total financial assets. In 2022/23, the SARB increased this to R639.10 billion, representing 51.9% of its total financial assets.

It also significantly increased its holding of Euros, which grew from R29.55 billion to R42.64 billion. The Reserve Bank’s also increased its holding of the Chinese Yen from R60.63 billion to R69.49 billion.

*Headline image source: Ryan Rayburn/IMF Photo