Snippet: Exchange rate determination in South Africa

In her first appearance as South African Reserve Bank Governor before Parliament's finance committee, Gill Marcus said, that the Bank would not intervene in the foreign exchange market to keep the rand at a particular level. Marcus made clear that “it is not the Bank’s task or desire to intervene to find a rate we feel comfortable with. We do not do that, and we will not do that”. As mentioned in her first MPC statement earlier this week, Marcus said, however, that issues surrounding the mandate of the Reserve Bank remained open to debate. This follows meetings of the ANC’s National Executive Committee over the weekend in which it expressed the need to review the mandate of the SARB, as well as look at ways of weakening the currency in order to improve the competitiveness of SA’s export sector. According to Governor Marcus, discussions between ANC alliance members, the NEC, the Ministry of Finance and the SARB are likely to take place soon, with the SARB to report back on the discussions sometime in February 2010.