Johannesburg - The rand’s 16-percent slide against the dollar this year was benefiting exporters and the South African authorities did not have the resources to influence the currency, Finance Minister Pravin Gordhan said yesterday.
“There are some signs that the more agile exporters are taking opportunities now that they couldn’t take two years ago or a year ago,” Gordhan said on Bloomberg TV.
“We would appreciate less volatility, particularly for players in the real economy who require more stability, more certainty. But equally, we’ve moved into a period where firms need to be more agile, more innovative.”
While the Reserve Bank had been boosting foreign currency reserves, it did not have the financial leverage to influence the level of the currency.
“A few countries have tried it and they’ve lost a lot of money,” he said, referring to intervention in the foreign exchange market. “We don’t have those sorts of resources.”
While the economy would miss its target of 2.7 percent expansion this year, the growth rate would not be below 2 percent, said Gordhan.
BMW’s plan to halt expansion plans in South Africa due to lengthy pay strikes was a “worrying sign”, he said.
The government would hold talks with car makers to assure them of plans to improve the economic environment. - Bloomberg