Global Courant
Gold is one of the most coveted and valuable metals worldwide, playing a crucial role in finance, industry and the arts, while symbolizing wealth and prestige. Governments around the world are accumulating gold in their reserves as a store of value or as a means of risk diversification. The reserves are managed by the central banks. This practice serves to preserve the value of their foreign reserves and reduce dependence on assets such as foreign currency or government bonds.
Gold reserves provide stability and liquidity and act as a buffer for a country’s currency in difficult times. Unlike paper currencies that are sensitive to inflation and global economic shocks, gold’s value remains relatively stable, making it a reliable asset.
The Earth is rich in natural resources, distributed in sizes all over the world. While one country may possess vast reserves of crude oil, another may boast extensive reserves of cobalt and copper. In the case of gold, some countries have significant natural reserves, while others have significant reserves. This article examines the currency performance of African countries with the largest gold reserves from June 2023.
1# Algeria (174 tons)
According to Trade Economics data, Algeria had the highest gold reserves in Africa as of June 2023, estimated at 174 tonnes. Notably, Algeria’s gold reserves remained stable at 173.56 tonnes in the second quarter of 2023, consistent with the first quarter.
The Algerian dinar, the official currency of North Africa, has maintained relative stability compared to its regional counterparts. At the beginning of the year the price traded at 137.168 DZD/$1, but decreased since then up to 137.4079 DZD/$1.
2# Egypt (126 tons)
Egypt ranks second among African countries with the highest gold reserves, with 126 tons as of June 2023. In the second quarter of 2023, Egypt increased its gold reserves from 125.63 tons in the first quarter.
In contrast to the stability of the Algerian dinar, the Egyptian pound has faced turbulence all year due to rising inflation. Suggest projections that the Egyptian pound could lose almost 20% of its value by the end of 2023. It started the year at 24.751 EGP/$1 and is currently trading at 30.8976 EGP/$1.
3# South Africa (125 tons)
South Africa ranks third among African countries with the highest gold reserves, which increased to 125.41 tonnes in the second quarter of 2023, up from 125.38 tonnes in the first quarter.
Despite South Africa experiencing high inflation in recent months, annual consumer inflation fell to 4.7% in July. the lowest since July 2021 when it was 4.6%. Furthermore, the South African Rand, which was trading at R17.3851/$1 early this year, is now trading at R19.1769/$1.
4#Libya (117 tons)
Libya has the fourth largest gold reserves in Africa, with an estimated 117 tonnes as of June. Libya’s gold reserves remained stable at 116.64 tonnes in both the first and second quarters of 2023.
Two years ago, Libya devalued its currency, the dinar, at a rate of 1 dollar = LD 4.48 for all transactions to equalize exchange rates. However, starting this year, the dinar has undergone a significant decline, trading at LD4.87496/$1compared to LD4.75230/$1 in January.
Recent challenges, such as the flooding in the Mediterranean Sea, have put further pressure on the Libyan economy.
5#Morocco (22.12 tons)
Although Morocco has the fourth largest gold reserves in Africa, it lags considerably behind Libya with an estimated 22.12 tonnes. This figure remained unchanged throughout the first quarter of 2023.
Morocco, known as one of Africa’s top tourist destinations, has seen relative currency stability over the past year. The exchange rate between the US dollar and the Moroccan dirham (MAD) started the year on 10,210 MAD/$1 and stood at 10.285 MAD/$1 on September 27.
