Net reserves were $18,70bn at the end of January, up from $17,19bn at the end of December, the Bank said in a statement posted on its website. Gross reserves increased to $22,166bn from $20,65bn.

"The increase in reserves partly reflects foreign exchange purchases arising from FDI-related transactions," the Bank said.

Analysts said the foreign direct investment related to the sale last month of building services company Waco International for R5,4bn to its senior management, CCMP Capital and JP Morgan Partners.

"Nice strong build through January and not entirely unexpected. $900m of that would have been attributed to the Waco deal, which suggests that the Reserve Bank only bought in the region of $300-$400m in the open market," said George Glynos, markets analyst at ETM.

Foreign exchange reserves rose by $1,3bn to $19,89bn at the end of January.

"The increase in the foreign exchange reserves reflects a combination of valuation adjustments and foreign exchange operations conducted by the Reserve Bank for its own account and on behalf of customers during a month which saw active trading in the market," the bank said.

The Reserve Bank occasionally takes advantage of the currency’s strength to buy dollars to build up its reserves. It has repeatedly said that this is not aimed at influencing the level of the exchange rate.

SA brought a long-standing negative reserves position into balance early in 2004 with the elimination of its forward book.

Since then net reserves have more than doubled, but still tend to lag comparable emerging markets.