Treasury rules out further drawdowns from GFECRA to boost revenue
Responding to public comments on the budget on Friday, the head of the Treasury’s Asset and Liability Management, Ravesh Rajlal, told Parliament’s finance committees it was not an option to take out more money.
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CAPE TOWN - The National Treasury has ruled out any further drawdowns from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA) to bolster revenue.
In last year’s budget, the finance minister announced a R100 million withdrawal from the account to pay off some of its debt.
The account, held by the South African Reserve Bank (SARB), is meant to protect the country against foreign exchange fluctuations.
There is currently around R390 billion in the account.
Twenty-five million rand will be drawn down in each of the next two financial years.
Responding to public comments on the budget on Friday, the head of the Treasury’s Asset and Liability Management, Ravesh Rajlal, told Parliament’s finance committees it was not an option to take out more money.
"There is an agreement that we have with the SA Reserve Bank, and what we need to do is that gets updated on a yearly basis, so I think at the time of the medium-term budget policy statement, we will make further announcements in that regard."
Rajlal said it was also not preferable to renegotiate the country's debt because it would send a distress signal to the markets.
"So, it's important to highlight that we don't go into a renegotiation of our debt, because that will result in a significant impact on our debt stock. What will happen then, obviously, is the ratings agencies will downgrade us and obviously that will have serious repercussions for our borrowing programme."