By Nasreen Seria Feb. 5 (Bloomberg) -- South African gross gold and foreign currency reserves fell for a second consecutive month in January as the dollar strengthened, cutting the value of reserves held in euros and other currencies. Gross gold and foreign currency reserves declined 0.5 percent to $39.5 billion last month, the Pretoria-based South African Reserve Bank said on its Web site today. Net reserves dropped to $38.6 billion from $39 billion. The dollar strengthened against 13 of the 16 major currencies tracked by Bloomberg last month, gaining 3.3 percent against the euro. In the same period the price of gold fell 1.5 percent, cutting the value of the reserves. “Due to the diversified nature of the foreign exchange reserves the appreciation of the dollar against various other currencies impacted negatively on the foreign exchange reserves,” the Reserve Bank said. “The gold reserves also declined due to a lower gold price.” The Reserve Bank hasn’t increased the pace of dollar purchases to curb the rand’s 28 percent rally last year, even after Finance Minister Pravin Gordhan said the local currency was too strong and exporters complained that it was making them uncompetitive. Foreign currency purchases depend on “volatility conditions, the liquidity situation in the market and cost considerations,” Deputy Governor Daniel Mminele said on Jan. 28. The bank is committed to a “flexible exchange rate,” he added. To contact the reporters on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net

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