South African Reserve Bank Governor (SARB) Lesetja Kganyago has reaffirmed that South Africa’s currency policy remains one of a free-floating exchange rate but added that the central bank would seize opportunities to strengthen reserves when market conditions allow.

Speaking to Bloomberg at an investment conference, Kganyago stated: “If an opportunity offers itself that there are cheap dollars or cheap euros in the market, we might take advantage of that to build reserves.” He added that such action would not mark a shift in policy, saying: “We do not target the exchange rate.”

Kganyago explained that the SARB may intervene only to smooth volatility in exceptional cases. “If there are once-off big inflows into the market, we would in some way participate in creaming that off so that you do not cause extreme movements in the exchange rate,” he said.

He further noted that South Africa’s current reserves were: “adequate,” but that the central bank would continue adding to them when feasible.

Building foreign exchange reserves helps the central bank mitigate the impact of global shocks on the economy. These reserves stabilise the rand, support external debt payments, and reassure investors. They also give policymakers room to manage liquidity and protect the economy from sudden capital outflows.