Antony Sguazzin and Renee Bonorchis
FINANCE Minister Nhlanhla Nene was worried a probe into foreign currency manipulation might expose risks in the banking system, as government officials prepare to meet the Reserve Bank to discuss the investigation, he said yesterday.
“We are very concerned,” Nene said in an interview at a meeting between business and government leaders.
The government would meet with the Reserve Bank today to understand what had happened and if there was any impact on the financial system.
The Competition Commission said early this week it suspected 11 companies of using electronic messaging software to co-ordinate foreign exchange deals when quoting prices to customers.
The Reserve Bank, which regulates South African lenders, said the antitrust agency was reacting to a complaint against “certain foreign exchange traders”, without giving further information.
JPMorgan Chase, Citigroup, Barclays Africa, Standard Bank and Investec were among the lenders named.
“It was something we were only notified of two days ago, so we’ll have to see where it goes,” Stephen Koseff, chief executive of Investec, said yesterday.
Justice Department
The ministry might make a public statement about the foreign exchange investigation in time, Nene said. Hlengani Mathebula, a spokesman for the Reserve Bank, did not answer calls to his phone.
After a global currency-rigging probe, six of the world’s biggest banks are paying $5.8 billion (R69bn) in settlements with the US Justice Department that were announced on Wednesday.
The investigation had not reached South Africa until this week, when the Competition Commission said it wanted to send a “clear message” and had evidence traders dealing in the rand had been fixing prices in relation to bids, offers and bid-offer spreads.
At 5pm, the rand, which has dropped 12 percent against the dollar in the past year, was bid at R11.8109, 5.12c stronger than at the same time on Wednesday. – Bloomberg