Wednesday 2020-08-12




By Qondile Ntiwane | 2019-08-14

The Gross Official Reserves have grown by 18.3 per cent, rising from E5.1 billion to E6.1 billion at the end of July 2019.

The increase in the reserves emanated from the inflow of Southern African Customs Union (SACU) revenues in the first week of July 2019.

The Recent Economic Development released by the Central Bank of Eswatini (CBE) yesterday indicated that the Reserves were enough to cover an estimated 2.7 months of imports, an improvement from the 2.3 months recorded the previous month.

 In SDR terms, the Reserves amounted to SDR311.4 million, 19 per cent higher compared to June 2019. However, compared to over the year, the Reserves depicted a decline of 15.9 per cent in Emalangeni terms and 20.6 per cent in SDR terms.

The reports also stated that the Lilangeni/Rand exchange rate regained strength in July 2019 against other the major currencies.

Against the US Dollar, the Lilangeni appreciated by 3.8 per cent to average E14.04 from an average of E14.60 in June 2019; against the Pound Sterling, the Lilangeni appreciated by 5.3 per cent to average E17.51 from an average of E18.50 in June 2019.

The local unit also appreciated against the Euro by 4.4 per cent to an average of E15.76 from E16.48 in June 2019.

It further highlighted that the local currency benefitted from the Rand, which somewhat withstood political and economic pressures in South Africa as it gained from external developments.


The struggling economy of South Africa, coupled with the positive inflation outlook convinced the South African Reserve Bank to cut its repo rate by 25 basis points in July 2019.

 This decision surprisingly left the Rand stronger as the markets responded positively to the cut. Although the South African economy faces fiscal challenges, partially due to the increasing Eskom burden and poor growth prospects, the Rand benefitted as the dovish US Federal Reserve Bank began their easing cycle, cutting interest by 25 basis points to 2-2.25 per cent.

At the end of July 2019, the Lilangeni traded at E14.15 to the US Dollar, E17.20 to the Pound Sterling and E15.78 to the Euro.

 The Lilangeni/Rand outlook remains vulnerable to the implementation of South Africa’s policy changes intended for the improvement of economic growth and fiscal position. In addition, the resurfacing US-China trade war and Moody’s grading of South Africa could have a negative impact on Lilangeni/Rand performance.

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