OWN CORRESPONDENT, Johannesburg | Wednesday 10.00am.
THE Reserve Bank is sticking to its laissez-faire policy of leaving the rand to find its own level, having not intervened to protect the currency during its latest difficulties this week, Reserve Bank GM Bertus van Zyl said on Tuesday.
Van Zyl confirmed that the Bank has not intervened in the currency market to bolster the rand in the spot market since July 3, although he did not rule out Bank intervention in the forward market through swap transactions.
Economist are concerned, however, that further intervention in the forward market will increase the Bank’s net open foreign exchange position, which stands at $22,9-billion. The Bank’s open position reflects its future dollar liabilities, which are not covered by its dollar assets.
JP Morgan economist Peter Worthington on Tuesday released a detailed account of the Bank’s activities in the forward market. The rapid rate of the rand’s depreciation over the past few months means that there is a far greater gap between spot exchange rates and those contracted in forward deals in the past few months. Depending on where the rand stabilises, Worthington said in the report, losses for the fiscal year could range from R11-billion to R25-billion.