The government and the Big Business Working Group have agreed to set up a joint working team to consider ways of managing the impact of the strong rand, Minister of Environmental Affairs and Tourism Valli Moosa said on Thursday.
President Thabo Mbeki led a government delegation in a normal scheduled meeting with the working group at Tuynhuys in Cape Town on Thursday.
Briefing the media after the meeting, Moosa said one of the issues discussed was the strengthening of the rand and its effect on the country.
There was consensus among the participants that it would not be sensible for the government to attempt any intervention measures to contain the currency’s strength.
However, there was agreement it was important to consider what could be done to limit the rand’s volatility, and there were no quick answers to this.
A joint working team would be set up to consider the matter, Moosa said.
Speaking on behalf of the big business delegation, New Africa Investments Limited (Nail) CEO Saki Macozoma said it was agreed that the most important thing was the rand’s stability.
It was also agreed that the currency was overvalued, and steps had to be taken to ensure that when the correction came it was not ”violent”.
Meanwhile, the ”painful” impact of the strong rand on business had to be managed.
Business accepted the reality that the country would be in a strong-rand environment for some time.
The issue of government intervention had not even been discussed, and it had simply been agreed this should not be done, Macozoma said.
The government delegation included Moosa, Minister in the Presidency Essop Pahad, Minister of Finance Trevor Manuel, Minister of Justice and Constitutional Development Penuell Maduna and Minister of Labour Membathisi Mdladlana.
The big business delegation included Macozoma, Paul Kruger of Sasol, Dave Brink of Murray and Roberts, Mike Spicer of Anglo American, Reuel Khoza of Eskom and Brian Whittaker of Business Trust. — Sapa