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News

 Economist describes rand manipulation saga as a storm in a teacup

todayNovember 21, 2023 281

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Economist, Dawie Roodt, has described the latest rand manipulation as a storm in a teacup that politicians are using to divert attention from their failures.

Twenty eight banks, both international and local, are implicated in the alleged foreign exchange manipulation between 2007 and 2013.

The Competition Commission recently fined British multinational bank, Standard Chartered, R42 million after it admitted to colluding in the fixing of the rand.

On Monday, the Presidency announced that the UK bank has agreed to testify as a witness in the prosecution of the banks.

The scandal has caused massive public outcry and divided some sectors of society.

However, Roodt has rejected the claims that these banks nearly collapsed the economy and are to blame for the high cost of living that’s seen South Africans lose their homes and struggle to make ends meet.

He says they only split the market, leaving a marginal impact to the economy.

“So the answer perhaps, must be to get the Reserve Bank to issue more licenses and allow more people to trade in currency and in fact completely scratch foreign exchange regulations, and if you do that, there will be less opportunity to manipulate the market.”

 

On the other hand – another scholar, Professor Sam Koma, has called for the harshest sentence to be meted out on all implicated banks.

Koma says the banks took advantage of the system after a 2001 Rand Inquiry set up by then President Thabo Mbeki found no gross wrongdoing against all of them.

He says this time around – there must be consequences for the banks, who he says, continued to operate with impunity and lack of accountability.

“Since some of these banks are implicated in the final report of the State Capture Commission, it is high time that this crucial sector of our economy is carefully and closely scrutinised by regulatory bodies.

“The exchange rate of the rand affects multitudes of stakeholders, including South African consumers, corporates, foreign exchange traders, investors, arms of government and multilateral institutions.”

Koma says the revoking of the licenses of the implicated banks will send a clear message.

 

A number of South Africans have taken to social media to ventilate their thoughts on the matter, which has had tongues wagging for days now.

@godpenuelStandard Chartered Bank Fined R42.7 million for Manipulating the Rand/Dollar Exchange.

♬ original sound – Penuel The Black Pen

Written by: Lindiwe Mpanza

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