South Africa, Africa’s economic powerhouse, is “reasonably well insulated” from the global financial crisis despite expecting low export revenue this year, Finance Minister Trevor Manuel said on Friday.
“In relative terms, South Africa has not been badly affected by the current global economic turmoil,” Manuel said in an interview on SAfm radio.
“South Africa is reasonably well insulated,” he said.
“On exports, we are likely to see low revenue this year” as a result of the crisis.
The country is one of the world’s major exporters of gold, which has not yet been damaged by the current crisis.
South Africa’s foreign-exchange earning exports also include platinum, coal, diamonds, aluminium, iron and steel, paper products, automotive parts and accessories.
Manuel also said that banks in the country have so far been sheltered from the fall-out of the financial crisis that started in the United States.
“Our banks are well supervised and we are relatively assured on this banking side,” he said.
South African banks say they have minimal exposure to the subprime or high-risk home-loan securities at the root of the US crisis that has led to the collapse of a growing list of US and European banks and financial groups.
On Friday the South African rand tumbled almost 3% in early trading.
“The rand volatility is influenced by the current global crisis, the stocks have taken a great deal of pressure to the exchange rate,” said T-Sec economist Mike Schussler.
On Friday the all-share index on the JSE opened down 3,74% to 20 457,13 points. — AFP