BY MBONO MDLULI
MBABANE – Government has recorded monthly reserves of E9.9 billion in the month of April 2024, rising from E7.6 billion.
This figure shows a monthly and yearly increase of 25.6 percent and 5.3 percent, respectively.
The latest economic development is contained in the Monthly Statistical Release March/April 2024, which was released by the Central Bank of Eswatini (CBE) today.
According to Investopedia, reserves are an asset in a country’s balance of payments. In addition to domestic reserves, central banks typically hold foreign currency reserves as well. The U.S. dollar is the dominant reserve asset, so most countries’ central banks hold much of their reserves in U.S. dollars.
According to the report, the reserves increased by 25.6 per cent month-on-month and 5.3 per cent year-on-year to close at E9.9 billion at the end of April 2024.
The month on-month growth in reserves was largely boosted by the quarterly inflow of Southern African Customs Union (SACU) revenue at the beginning of April 2024. At this level, the import cover grew to 2.9 months from 2.3 months recorded in March 2024.
Valued in special drawing rights (SDR), the report states that the reserves rose by 27.2 per cent month-on month and 4.9 per cent year-on-year to close the month of April 2024 at SDR398.1 million. According to the International Monetary Fund (IMF), the SDR is an international reserve asset. The SDR is not a currency, but its value is based on a basket of five currencies—the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
The IMF created the SDR as a supplementary international reserve asset in 1969, when currencies were tied to the price of gold and the US dollar was the leading international reserve asset. The IMF defined the SDR as equivalent to a fractional amount of gold that was equivalent to one US dollar.
When fixed exchange rates ended in 1973, the IMF redefined the SDR as equivalent to the value of a basket of world currencies. The SDR itself is not a currency but an asset that holders can exchange for currency when needed. The SDR serves as the unit of account of the IMF and other international organisations.
