Gordhan on Reserve Bank exhange rate policy.

Speaking to reporters in Parliament, Finance Minister Pravin Gordhan said that National Treasury would continue to help the South African Reserve Bank acquire foreign exchange reserves for the sake of stabilising the rand, “as and when we can”. Gordhan did, however, say that the Treasury and the Reserve Bank would continue to “review its stance as the times dictate”. In the most recent gold and foreign exchange reserve numbers released by the Bank for March, there was very little evidence that the Bank was actively purchasing large amounts of foreign exchange with the intention of influencing the value of the currency. Minister Gordhan’s comments yesterday can be seen in much the same light as that communicated by Governor Marcus and other officials of the Bank who have stressed on a number of occasions that the Bank would only look to accumulate foreign exchange reserves as and when market conditions permit and that the costs associated with sterilising the currency were too high. When questioned on whether the recent USD3.75bn loan granted to Eskom by the World Bank would have a significant impact on the rand due to a potential large inflow of capital, the minister said that the loan was just concluded and that therefore no money had yet come in.