A Review Of Forex Market History Of South Africa

In the recent history of currency trading in South Africa, the primary focus has been shifted to reducing the debt to within acceptable risk limits. This is done with the diversification of funding instruments like currency trading and ensuring flexible government access to markets as secondary goals. The foreign currency borrowing has been stepped up to reduce the foreign currency exposure of the South African Reserve Bank in its forward market portfolio.

If we take into account the very recent Forex history of South Africa shows that the state debt costs is continuing to fall as a share of government expenditure. It was projected to be 4.1% of Gross Domestic Product during the period of 2003-2004 and it was expected that it would decrease to 3.8% of GDP in 2005- 2006. However, the liquidity in the domestic government bond market, measured by the increase in nominal trades, has improved substantially in the forex trading history of South Africa during the recent years.

Here are some of the important facts and figures related to Forex history of South Africa. In early 2000, the Bond Exchange of South Africa (BESA) had granted listings to 272 bonds issued by 43 borrowers. The total nominal value was 442 billion of South African Rand. The approximately 60% value of this debt had been issued by the central government of the South Africa. The public sector borrowers had reduced their outstanding domestic marketable bond debt during the period of 2002- 2003.

The amount of net redemptions of fixed interest securities was equal to R4.2 billion during the period 2002- 2003 as compared to the net redemptions of R15.2 billion in the same period of 2001-2002. In contrast, the outstanding nominal value of private sector loan stock listed on BESA increased rapidly in 2002, from R28.9 billion in June 2002 to R40.9 billion in March 2003. Government raised R10.7 billion through foreign currency denominated debt issues in the international bond markets in 2002/03, compared with R12.4 billion in 2001/02.

The forex history of South Africa’s debt, both domestic Rand-denominated bonds and foreign debt issues has enjoyed the increased recognition on international capital markets. This clearly indicates the success of country’s macro-economic and sustainable fiscal along with maturity of South Africa’s financial markets. South African foreign debt continues to trade at tighter spreads than the Emerging Market Bond Index. The credit of this growth goes to sound and transparent approach to debt management and a healthy balance of payments position.