South Africa saw larger Foreign Direct Investment (FDI) inflows in the second quarter than the first quarter as domestic firms received debt and equity funding from foreign parent companies, central bank data showed on Wednesday.
The South African Reserve Bank (SARB) said in its quarterly bulletin that the country had FDI inflows of 26.3 billion rand about $1.76 billion in the second quarter from inflows of 11.7 billion rand in the first three months of the year.
SARB said the country registered portfolio investment inflows of 10 billion rand from April to June from inflows of 29.2 billion rand in the prior quarter.
South Africa relies heavily on foreign money to cover its large budget and current account deficits, with data showing that foreign investors held 37.3% of South African government bonds as of August.
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But investor confidence in South Africa remains fragile, while the economic growth outlook is clouded by a lack of clarity and progress on reforms.
The financial account of South Africa’s balance of payments recorded an inflow of capital of 13.2 billion rands or one percent of GDP, in the second quarter from 24.1 billion rands in the first quarter.