The National Treasury has confirmed that there is no immediate plan for a review of the Gold and Foreign Exchange Contingency Reserve Account (GFECRA), which some economists have argued should be drawn on to help narrow the gap between revenue and expenditure.

The GFECRA reserves are said to stand at about R450-billion currently.

Ahead of the Medium-Term Budget Policy Statement, South African Reserve Bank deputy governor Rashad Cassim, noted that GFECRA gains were unrealised and subject to rapid shifts depending on exchange rate movements.

Dipping into the account was also not cost-free, as distributing profits without selling foreign exchange reserves would entail monetisation of the balances, which implied liquidity management costs for the Bank. 

“It is important to emphasise that the GFECRA balances are not a windfall that can be enjoyed with no further costs,” Cassim told the Business Times.