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UK interested in SA and the Rand continues to strengthen

March 8, 2010 10:15 by Admin

The South African Rand began trading last week Monday the 1 March 2010 at 11.7558 to the British Pound and 7.715 to the US Dollar. The South African Rand closed on Friday the 5 March 2010 at 11.244 to the British Pound and 7.482 to the US Dollar. The Rand was trapped in a tight range on Wednesday midday, ahead of further news out of Greece on its fiscal issues. The Rand remained well positioned in the afternoon session on Friday ahead of the US non-farm payrolls data release.

Finance Minister, Pravin Gordhan said on Thursday that ‘South Africa is looking at the impact of the carry trade on its Rand currency and is weighing its options to limit currency volatility.’ The carry trade involves investors borrowing currencies with low interest rates and investing it in high-yielding currencies. Gordhan was against the adoption of capital controls but noted that the International Monetary Fund (IMF) seems to be shifting its views on the restrictions of capital movement. Gordhan said at a presentation at Bloomberg that ‘we have made a commitment that we will lean against the wind…we want less volatility.’

Over the past week, the South African Government officials and business representatives have been in discussions with British investors, the discussions were mainly about nationalization and empowerment. Anitha Soni, chairperson of the International Marketing Council said that the interest in the meetings were overwhelming. According to Soni, the British business people saw potential in South Africa, ‘not only for the market opportunities it offered, but also for using South Africa as a gateway to the rest of the continent.’ Other important issues discussed were the energy growth potential, mining and education. Britain is one of South Africa’s top trading partners and the biggest investor in this country. Due to the fact that Britain’s economy is still in recession the trade and investment have been negatively affected.

According to the South African Revenue Services (SARS), Julius Malema, president of the ANC youth league has not paid any taxes in the last two years since his been elected. Additionally, not one of the four companies of which he still has shares has complied with the tax regulations. Malema commented on the allegations, by saying that he was being targeted and that SARA was welcome to investigate.

Composed by Candice Goodall
:: Note: The above exchange rates are based on "interbank" rates.
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