STEVEN MANN, Cape Town | Wednesday 6.45pm.
FINANCE Minister Trevor Manuel on Wednesday reitterated his assertion that the rand’s slide had more to do with dollar strength than the anarchy in neighboring Zimbabwe, but declined to be drawn as to whether anything would be done to shore up the ailing local currency.
Addressing parliament, Manuel said floods in Mozambique and wars raging elsewhere on the continent were contributing towards a general afro-pessimism, which was also adversely affecting the rand.
He urged those looking for guidance on interest rate movements to closely watch the Reserve Bank’s monetary policy committee, which will be in session on Thursday.
Manuel said the rand had held up relatively well against currencies other than the dollar, and stressed that South Africa’s financial policy had to take a long-term view.
The Democratic Party’s Ken Andrew pointed out that South Africa had seen a net outflow of R13 billion in foreign capital in the first few months of the year, and said the government’s policy of condoning lawlessness in Zimbabwe was partly to blame.
But the African National Congress’ Andrew Feinstein countered with statistics quoted in the Economist magazine that 75% of emerging markets had depreciated against the dollar, and 50% of them had seen capital outflows.