SOUTH AFRICAN Reserve Bank Governor Tito Mboweni said on Tuesday the testimony of private banks at the government’s rand inquiry had left the impression that the banks had something to hide.
”I have been somewhat disappointed by the behaviour of private banks in this country, in terms of their testimony at the…commission,” Mboweni told the Executive Management Institute of Southern Africa.
”It has left me with the impression that maybe private banks may have something to hide. They have sought to divert away attention to whatever they may have done to the Reserve Bank.”
President Thabo Mbeki launched the inquiry into the rand’s unprecedented 37% plunge against the dollar after a business leader alleged that ”dubious” deals had helped manipulate the market.
Public hearings for the inquiry have so far focused on a 350 million euro asset swap set up last year by Deutsche Bank for synthetic fuel producer Sasol to help it fund an offshore acquisition.
But steps taken by the Reserve Bank in October to more strictly enforce existing exchange controls have been cited by some who have testified, on the premise that they scared foreigners away from the market, reducing turnover to levels which magnified the impact of individual deals.
”What they did not explain is why it is that the currency is strong now when the same measures are still in place?” Mboweni said.
The central bank has raised its key repo rate by 200 basis points to 11.50% so far this year to quell inflationary pressures stemming from the rand’s decline.
The rand has recovered about 15% of its value against the US unit so far this year, on the back of broader dollar weakness, an improvement in commodity prices and a positive shift in sentiment towards South Africa. – Reuters