(Updates with central bank comment in fourth paragraph.)
June 7 (Bloomberg) -- South African reserves fell for the first time in six months in May, sliding 1 percent as the dollar strengthened against other major currencies including the euro and the pound, the central bank said.
Gross gold and foreign currency reserves declined to $50.1 billion from $50.6 billion in April, the Pretoria-based Reserve Bank said on its website today. Net reserves fell to $45.9 billion from $46 billion. The dollar gained against 14 out of 16 major currencies tracked by Bloomberg in May, advancing 3 percent against the euro.
“The decrease in the gross reserves was primarily due to valuation adjustments associated with the appreciation of the U.S. dollar against other major currencies,” the central bank said.
Gold reserves, which account for about 12 percent of gross reserves, decreased by $8 million to $6.2 billion in May from the previous month, the data showed. The spot price of gold fell 0.6 percent last month.
The rand has climbed 2.7 percent against the dollar since the beginning of March, undermining the competitiveness of exports. The currency was at 6.768 against the dollar as of 8:20 a.m. in Johannesburg from 6.7767 before the data was released.
“We have an overvalued currency driven by flows of capital,” hurting manufacturing industry, Trade Minister Rob Davies said yesterday.
--Editors: Ben Holland, Philip Sanders.
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