South African gold and foreign currency reserves fell 3.4 percent in September, the biggest decline in almost three years, as bullion slumped and a stronger dollar cut the value of holdings of euros and pounds. Gross reserves dropped to $49.7 billion, the Pretoria-based Reserve Bank said on its website today, lower than the $51 billion median estimate of nine economists in a Bloomberg survey. Net reserves fell to $47.9 billion from $49.1 billion in August. “A lower U.S. dollar gold price at month-end resulted in a significant decrease in the value of gold reserves, while the appreciation of the U.S. dollar against other major currencies led to a sizable downward valuation adjustment in foreign exchange reserves,” the Reserve Bank said. Gold dropped 11 percent in September, falling from a record $1,900.23 an ounce on Sept. 5, as concern mounted the global economy may fall into recession because of weakening demand in the U.S. and a debt crisis in Europe. The Reserve Bank may slow the pace of dollar purchases as a sell-off in global financial markets caused the rand to slump the most in three years last month. The rand gained 0.3 percent to 7.9497 against the dollar as of 9:13 a.m. in Johannesburg, paring its decline this year to 17 percent. Gold reserves slipped 11.3 percent to $6.5 billion in September from the previous month, the central bank said. To contact the reporters on this story: Franz Wild in Johannesburg at fwild@bloomberg.net; Andres R. Martinez in johannesburg at amartinez28@bloomberg.net To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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