Ramaphosa urges calm in the face of falling rand
There is no need to panic. So says Deputy President Cyril Ramaphosa about the continued weakening of the local currency, which analysts have warned could fuel inflation and hurt South Africa’s growth prospects. The rand tumbled to as low as R17. 99 to the US dollar as Asian markets opened on Sunday night before pulling back to R16.72 on Monday morning.
“We have been here before. We should never forget that South Africa has been where we are now. There was a time where the rand to the pound was around R24, R26 even, but we did recover. The function of the economies is that they go up and down. Currencies [do that] as well. The key question is what are we [government] doing,” said Ramaphosa during the SABC’s breakfast briefing on Monday.
Ramaphosa said South Africa was not the only country facing economic challenges. China, which is the second largest economy in the world, and Brazil were among the countries facing the same economic challenges with South Africa.
“We should appreciate that South Africa is part of the global economy and because we are key players in the global economy, we are going to be susceptible to what happens in the global economy generally and we should not panic. Many currencies, particularly within our comparator countries, are under tremendous pressure right now with all the global movements. And in our case, [it] is issues such as the balance of payments and we are importing a lot more than what we are exporting. That has a downward pressure on our currency. But if you were to talk to people who are exporting, they will tell you that they are getting more from what they are exporting because that in many ways make them happy,” said Ramaphosa. He said the government has done a lot to instil economic certainty and economic stability in the country.
“So there are a number of measures that we are taking, that we are going to continue taking. The president [Jacob Zuma] is going to have a meeting with the business community in a short while from now to discuss precisely some of the measures we can take,” Ramaphosa said, adding that South Africans needed to work together to improve the economic situation.
“This is the time where we require all South Africans to work together. This is not the economy of the ANC or the government alone. It is our collective economy and we need to work together to see what needs to be done to shore up our currency, to make sure that exports move. We don’t want a situation where devaluation of the rand lead to increases in food stuff and other things that are essential for the population of our country,” said Ramaphosa.
Zuma shared his deputy’s sentiments.
“It should not be made the business of government only [to tackle economic challenges]. All of us [need to be involved]. The economy is in trouble. We can’t do things or do business as usual,” said Zuma. He urged business not to retrench workers and trade unions not to demand high salary increases during this difficult economic time.