STUART GRAHAM, Johannesburg | Thursday
THE appreciation of the currency over the past few days was an overdue correction, the commission into the depreciation of the rand heard on Thursday.
Investec’s global head of foreign exchange trading, Patrick de Villiers, was answering a question by assistant commissioner Christine Qunta on whether the volatile situation in Zimbabwe was interfering with the exchange rate.
”If the currency had hit R8,50 to the US dollar, I would have surmised that Zimbabwe was not a threat,” De Villiers said.
”I think what we saw was an overdue correction of the currency.”
He said there was a pattern in what international analysts wrote about South Africa.
”Lots of topics are repeated, like social unrest, the delay of privatisation, and the Zimbabwe situation.
”For some New York trader, who has never been to South Africa, his only insight to the country is what analysts and economists are writing.”
De Villiers earlier said the currency slide in the last quarter of 2001 was mainly because of negative sentiment.
He said 2001 was charged with negative issues like Zimbabwe, the delay in Telkom’s privatisation and the SA Reserve Bank intervening in the foreign exchange market.
”The market knew the SARB were buying US dollars to negate their net open foreign position.”
”International analysts were writing about this and the volatile situation in Zimbabwe.”
De Villiers said the rand slid sharply after the September 11 attacks on the United States.
”The attacks hit the South African market substantially, because in times of trouble capital will fly into a safety zone.
”In this case it was the US treasury, where there were massive gains.” – Sapa