TUESDAY, 11.15AM:
The crisis on the Johannesburg Stock Exchange last week proved that the rand remained vulnerable to external events, Finance Minister Trevor Manuel said yesterday.
While the economy had made progress since last year, the losses suffered last week, when the rand dropped to record lows against the dollar and the all share index experienced its biggest one-day drop since 1987, demonstrated that the country was not out of the woods.
Speaking to the African Economic Research Consortium, Manuel said that South Africa, dependent on sustained capital inflow from the rest of the world, had yet to earn the loyalty of international investors, who “switch out of emerging markets at the first opportunity”.
Economic policies imposed following the rand crisis in June last year had resulted in clear improvements, but, Manuel said, “the challenge of building an economy that will enable us to implement the RDP remains”.