After the Bell: Manipulating the rand — really?

I sometimes wonder if that feeling, that horrible desperation, the feeling that our currency is so weak, is behind the very strange story about claims that a group of 28 banks, both South African and foreign, manipulated the rand.

The backstory is long and complicated, but essentially, the Competition Commission says it has evidence that traders working for the banks were part of a single conspiracy. There is talk of “rand-pairs” and secret chats on Bloomberg terminals – even phone conversations and secret agreements.

Considering that the phrase “rand-pair” is second only to watching golf in making my eyes feel somewhat weighted, it’s easy to understand how this thing has such political power.

It’s because, like the chap on par-who-gives-a-monkey’s, almost all of us have no cooking clue what is going on. 

And the moment I hear phrases like “manipulation” or “hedge” or “rand-currency-pair”, I immediately get the feeling you get when someone is trying to sell you car insurance.

You just know you’re being screwed.

But in fact, as former Daily Maverick journalist Ray Mahlaka once clearly explained, the currency market is just too big for it to have any impact on you. Around $50-billion (about R882-billion) is traded every day.

And while some of the banks involved are big, none are big enough to have played that particular game.

Now obviously, some people did play games with the currency.

Absa was the first to announce that it had discovered two of its traders were doing this. It told the regulators and suspended them. 

Standard Chartered and CitiBank have also admitted that some of their people were guilty. They’ve paid a fine and moved on with their lives.

But some of the other banks are fighting on.

As Business Live reported this morning, the Constitutional Court is finally expected to put all of this to bed one way or another in a four-day hearing next week.

One hopes the coffee machine at Constitution Hill can do double-time. Four days of a hearing about currency pairs is more than we mere mortals could possibly stand.

Two things have really struck me about this case.

The first is that I remember speaking to the Competition Commission about it in 2017. The recording is sadly lost now, but I remember so clearly how adamant they were that first, all the named banks were involved, and second, how they would wrap up this case in a couple of months.

It’s 2025 now, and it’s still going.

The other is the language used by the banks in their defence.

Take Sim Tshabalala, the CEO of Standard Bank.

I think it was the first time I’d seen a CEO of one of our big banks writing an op-ed in our media, back in 2023. It was on this topic.

Remember how dangerous it is for a CEO, who was not on the Bloomberg terminal or the Reuters chat or the phone conversation, to say anything dogmatic about what happened.

But this is what he said in News 24 two years ago:

“We’re not playing for time or looking for a deal. When we say that we are innocent of currency manipulation, we mean it. We will not settle. Where we found that our people have engaged in wrongful conduct, we will act swiftly and will work with the relevant authorities. Where we find no evidence of wrongdoing, we will protect and defend our people – our most valuable assets.”

This is a person putting their entire reputation on the line. 

He must believe it. Firmly, utterly, unshakeably. 

I have a horrible feeling in my belly that the Competition Commission might feel a little silly after all of this – that the Constitutional Court, after selecting a good nine-iron, might include a few choice words about the commission’s conduct in its final ruling.

But that won’t be the end of it.

I think the damage is done. 

Parties such as the EFF and MK, and perhaps even the SACP, who have every incentive to attack the system, banks and institutions, will just go on attacking them. I wouldn’t be surprised if we hear that phrase “monopoly capital” again.

They might even turn, again, on our judges.

It’s quite strange in one way. 

Julius Malema has mouthed off time and time again about “currency manipulation”. It almost makes you wonder what he might know about making a profit off the manipulation of a bank.

In the meantime, bankers who are innocent will probably feel pretty frustrated, too. And not just with their putting.

I think they’ll feel they’ve been dragged into something that they have nothing to do with.

I’ll tell you this for free, though. Like any golf tournament I’ve ever watched, I can’t wait for the whole saga to end. DM