South Africa's Currency Crisis

South African Daily Mail & Guardian ^ | 23:51 Monday 7 January 2002

[Byron_the_Aussie]

SOUTH Africa's largest business chamber is calling on the government to investigate the reasons for the recent sharp fall of the country's currency, its top official said on Friday.

Kevin Wakeford, South African Chamber of Business (Sacob) chief executive, said a commission was needed to investigate why the rand has last some 40% of its value since the start of 2001.

"We call on the relevant authorities to establish a commission to investigate the rapid demise in recent times of the rand," Wakeford said.

Last month the currency hit a new record low against the greenback, trading at over 13 rands to the dollar after starting 2001 at 7,58 to the dollar.

It recovered in the first week of the new year and by noon on Friday was trading at 12,06 to the dollar, 10,80 to the euro and 17,36 to the pound sterling.

Wakeford said he believed the rand's rapid slide could mainly be attributed to "certain institutions using dubious financial methods to manipulate the currency and thereby enrich themselves."

"One needs to get to the bottom of this all. There has been a number of unscrupulous transactions taking place," Wakeford said, but he declined to go into details. "Once you get to the bottom of that, the currency will stabilise," he added.

Some other factors mooted for the rand's poor performance are the current financial crisis in Argentina, uncertainty over presidential elections in neighbouring Zimbabwe and the slow pace of privatisation in the country.

"It is Sacob's view that these reasons are not entirely valid as they have already been factored in as contributing factors for a considerable period of time," Wakeford said.

"There is a strong likelihood that market manipulation through collusion between parties on transactions has contributed to the current demise of the rand," he said. Finance Ministry representative Logan Wort said any suggestions from business were welcomed but added that measures were already in place to prevent shady currency deals.

"I'm not sure a commission would make a difference. What we can do however is tighten up things like (current) legislation further to prevent this kind of thing from happening," he said.

Sacob represents some 40 000 businesses in the country, many of them small entrepreneurs who are being hard hit by rising import prices.

South African Finance Minister Trevor Manuel and Reserve Bank Governor Tito Mboweni late last month expressed concern over the fall of the rand and warned they would tighten existing rules governing exchange controls. - AFP

[Joe Boucher]

May be because of the enormous rise of crime, including murder, rape, assault and robbery. Random killing of whites, seem to chase away investment. No fool to figure this all out.

[BIGZ]

They ain't got a clue. The anc has the political power and they ain't got a clue. Down hill like the rest of Africa (Zimbabwe worked good when it was Rhodesia) and they still ain't got a clue.

Best kept secret in the American press, the the economical colapse of South Africa, and still they ain't got a clue. Aparthied no longer exists but the economy is nonexistant also, they ain't got a clue.

[beowolf]

Best kept secret in the American press, the the economical colapse of South Africa...

Your statement is literally true. The Press will not report it until they can portray the crisis as a rationalization for massive intervention and the 'nationalization' of all of South Africa's mines...it's coming, but most of the European Afrikaners have not been sufficiently painted as totally evil and persuaded to abandon all of their assests and leave the country that they have been living in for 300 years.

[Eric in the Ozarks]

There was a time when the Rand got you three or four American dollars...

[<1/1,000,000th%]

Wakeford said he believed the rand's rapid slide could mainly be attributed to "certain institutions using dubious financial methods to manipulate the currency and thereby enrich themselves."

I'm sure it has nothing to do with the collapsing economy.

[LostTribe]

Best kept secret in the American press, the economical colapse of South Africa,

The BBC makes the ANC sound like the 2nd coming. Their reporting on South Africa is right out of the '80s.

[Malcolm]

With all the anti-white activity in next-door Zimbabwe, and SA gov't's relative silence on that issue, the whites in SA probably see the writing on the wall and most are quietly moving their assets to more friendly and productive nations. SA is a lost cause; better to admit that and starting making exit plans instead of waiting until Mugabe exports his "economic policy" to next-door neighbor SA. If I were a South African white, I would be making plans to emigrate to Australia, the US, or some other friendly Western nation. The Jews knew what Hitler was planning, but thought they would be safe anyway. South African whites better learn that lesson of history. Failure to do so means you may end up being part of the next holocaust.....

[beowolf]

You're right...the last exchange rate in my mind was 3.75 Rand to $1. Sad.

[beowolf]

Yep...it's coming. Africa will, once again, truely be the dark Continent.

[verity]

"Yep...it's coming. Africa will, once again, truely be the dark Continent.

With the AIDS epidemic, it may become the DEAD continent!

[beowolf]

I totally agree. The orphan crisis, while tragic in humaitarian terms, will have consequences that are going to unimaginable. Especially to Europe, the only place they can walk to enmass.

[Nateman]

Perhaps its because they have imposed socialism and the government in order to maintain its habit of giving the unearned to the unproductive is running its printing presses at full speed. Of course any failure of socialism is bound to be ignored by a pro-socialist.

[archy]

Maybe the South African government can get a loan from Argentina to tide them over....

Well, maybe not....

-archy-/-

[backhoe]

Index-

[timydnuc]

I will make no secret of the fact that I though, years ago, that a minority white rule in South Africa was wrong. I believe in majority rule, and a republic to sustain and support that end. I am sorry to admit that I was wrong. It may be that the minority whites kept the majority black under their heal through denying education. I don't know. But, what is going on in South Africa now is mob rule, and the economy will greatly suffer for it. If the country goes broke, then it deserves to. It's time for the black majority in South Africa to look to the internal methods of correcting their injustice. Take the government and make it work. Devote their energy to education and commerce. These are good people. They are letting a vocal minority run the direction of their country (sound familiar?).

[backhoe]

I posted this:

A Capsule History of Southern Africa

and there's a link or two in it you may find informative. My thoughts & comments are fairly well represented within it. I always thought Apartheid was a bad form of government- except- it was better than what its neighbors practiced. And what has happened there. I fully expect both Zimbabwe & South Africa to implode into anarchy and self-destruction in a few years, and it is a pity.