AFTER months of speculation, the public will know on Friday the findings of the interim report by the Myburgh commission of inquiry into last year’s sudden depreciation of the rand.
Justice Minister Penuell Maduna is to release the report at the Pretoria press club after receiving the go-ahead from President Thabo Mbeki.
The inquiry, which started in January, has seen a lot of finger pointing between the major players.
Business and local banks appearing before the commission blamed the Reserve Bank for the rand’s 37% collapse late last year, following a circular from the bank on October 14 in which the Bank indicated that it would enforce exchange control rules more rigidly.
The Reserve Bank, however, blamed the too-rapid relaxation of exchange controls.
Banks were also made to squirm as they were forced to explain the intricacies of the financial products used to take cash out of the country.
Other factors outlined by witnesses included: the September 11 attacks; a lack of confidence in emerging markets following the financial crisis in Turkey and Argentina, and foreign investor hedging of rand-denominated assets.
Hopes that the commission’s forensic investigators, Gobodo and Deloitte & Touche, would come up with new evidence on deals that might have crashed the rand were dashed last Friday, when they presented their reports.
Gobodo was unable to say if the three asset-swap deals arranged by Deutsche Bank, which were cited by Wakeford as one of the ”dubious deals”, had contributed to the rand’s collapse late last year.
Deloitte, which scrutinised the activities of South Africa’s forex market players, found no evidence of unethical behaviour. It concluded that the rand’s collapse was driven by ”the combined impact of the millions of transactions that make up the market, which reflected an aversion to holding rands”.
When Deloitte asked authorised dealers to rank reasons for the rand’s depreciation, the majority cited the Bank’s actions, including the paying down of the net open forward position, the October circular and the resignation of deputy governor James Cross.
Political unrest in Zimbabwe received the second highest vote at 18%, compared with 26% for Reserve Bank actions and policies. In third place was ”emerging market contagion”.
Non-resident banks were off the hook after financial services partner KPMG found there was no indication that they ”were responsible for the rapid depreciation of the rand in November and December 2001”.
The financial consultancy was appointed to assist the commission in identifying transactions which contributed to the rand.
The benefits of the commission are already being felt, according to Finance Minister Trevor Manuel, who this week attributed the strengthening of the rand in the last two weeks to ”appropriate behaviour” resulting from changes expected to flow from the commission.
This was aided by a realisation that the depreciation of the rand had been overdone as well as the ”positive market sentiment about overall economic management”, he said.
The Myburgh commission was set up by President Thabo Mbeki this year following allegations by South African Chamber of Business (Sacob) CEO Kevin Wakeford that dubious dealings had led to the currency’s sharp fall in the latter part of last year.
Wakeford has been subjected to a great deal of criticism as a result of his allegations.
Whatever the outcome, Reserve Bank governor Tito Mboweni has warned consumers that the recent improvement in the rand is not yet cause for celebration.
He said on Tuesday that there was still ”a bumpy ride ahead,” and while he expected a safe landing, people should not go on spending sprees, or incur new debts. – Sapa