The African National Congress said at a media briefing to discuss the release of discussion documents on Tuesday that the rand needs to balance the interests of exporters and importers, and would not be drawn on what it considered an appropriate competitive level.
Head of the ANC presidency Smuts Ngonyama said: “We need to look at the rand from many different perspectives — if we look at mining, for instance, the profit level of platinum mining is far higher than that of gold mining.
“This profit level is impacted both by the level of the international prices of these commodities as well as the cost of production of these commodities. So, we need to balance what needs to be done with the cost of any intervention.”
The Congress of South African Trade Unions (Cosatu), the ANC’s alliance partner, wants a weaker rand, but the ANC — which has a broader mandate than looking after the interests of workers only — also wants to encourage foreign direct investment (FDI).
The two largest foreign FDI deals — namely the Barclays-Absa deal this year and the Telkom deal in 1997 — took place when the rand was relatively strong after a period of weakness. — I-Net Bridge