Movements in the rand currency are more likely to be linked to volatility of the United States dollar than other factors, such as recent attacks on migrant workers, South African Finance Minister Trevor Manuel said on Wednesday.
”I think that we’re living through a period now where there is a lot of volatility in exchange rate markets everywhere,” he said, when asked about reports that the attacks had led to rand weakness.
”A lot of it is, in fact, driven by high volatility of the dollar rather than a series of other currencies. So I don’t get my knickers in a knot about this every time I hear these stories.”
The rand lost almost 2% against the dollar on Tuesday, partly due to the violence, analysts say.
At least 25 foreigners have been killed in attacks in Johannesburg squatter camps since last week, and images of burning shacks and stabbed victims have been broadcast across the world.
Police are struggling to contain the violence by mobs carrying clubs and knives that accuse migrants of stealing their jobs.
The rand, which is prone to sharp volatility, was steady on Wednesday, trading at 7,6575 to the greenback, 0,16% firmer than its Tuesday’s close in New York.
The dollar has also been volatile as investors mull over whether the Federal Reserve has finished cutting interest rates. It hit a one-month low against the euro on Wednesday. – Reuters