Johannesburg - South Africa's net reserves rose by $579 million (R3.5 billion) last month to top $20 billion, a level seen internationally as a milestone for emerging markets.
And gross reserves increased to $23.84 billion from $22.969 billion at the end of March.
"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 as well as on behalf of customers," the bank said.
Gold reserves increased due to a higher gold valuation based on the price at the end of April 2006 compared with the previous month-end.
Kristin Lindow, a senior sovereign ratings analyst at Moody's Investors Services, said: "We have noticed that South African reserves have improved remarkably."
Last August Standard & Poor's (S&P) raised its long-term foreign currency and local currency credit ratings on South Africa and gave a stable outlook based on improved macroeconomic stability. The long-term foreign currency rating was lifted one notch to BBB+ from BBB, while the local currency rating was lifted one notch to A+ from A.
S&P's move brought it on par with Moody's, placing South Africa three notches above junk status.
Moody's said last year that Africa's sovereign credit rating was appropriate for the next 12 to 18 months at three notches above junk status at Baa1.
Lindow said South Africa's rating was two notches up - better than that of India and five notches better than that of Brazil.
This follows a warning from Moody's last month that South Africa's widening current account deficit could prevent a further upgrade in its credit rating in the near term. The deficit on the current account of the balance of payments will put pressure on the currency if it is not financed by capital inflows.
The Reserve Bank said that on a seasonally adjusted and annualised basis, the current account deficit rose to R71.6 billion in the fourth quarter, or 4.5 percent of gross domestic product (GDP), from R68.4 billion, or 4.4 percent of GDP, in the third quarter. The current account deficit for 2005 was R64.4 billion, up from R47.5 billion in 2004.
Veronica Kalema, an analyst with Fitch ratings agency said: " might be building reserves faster than we thought and I don't think the country is borrowing that much."
Mike Schussler, an economist at T-Sec, agreed that South Africa was gathering reserves. "The chances of a volatile rand becomes less as long as we continue building reserves."