As global currencies wobble, the Rand’s strength becomes an intractable problem
Where is Goldilocks when you need her? First the rand is too weak. Then it’s too strong. Where’s that bowl of “just right” porridge. The toxic combination of global financial restructuring and the economic crisis have had an odd effect on the value of the rand, boosting it to 13-month highs. Domestic issues have also helped tip the scales, with the potential Bharti/MTN telecommunications tie-up buoying the currency to highs that are positively destructive to manufacturing companies. Calls are mounting for steps to reverse the rand’s gains which erode the competitiveness of local exports, hurt mining revenue and threaten the expected recovery in SA’s bruised economy, Business Day reports. But analysts say there’s little the Reserve Bank can do to “manage” the exchange rate, although it could limit further appreciation.