Widen currency probe, says whistle-blower

File picture: Svilen Milev, Free Images

File picture: Svilen Milev, Free Images

Published Feb 1, 2016

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Durban - The man who blew the whistle on the collapse of the rand a few years ago has called for a widening of the probe by the Competition Commission into currency manipulation.

Kevin Wakeford, who blew the whistle on currency manipulation in 2002, wants more law enforcement agencies to be involved in the probe.

Read: What's going on with the rand?

Last May the Competition Commission announced that it was investigating six major banks for price-fixing in the currency market.

This was after the US and UK authorities fined JPMorgan Chase, Barclays Bank, Royal Bank of Scotland, Citigroup, Swiss-based UBS and Bank of America $5.6 billion (R89 billion) for currency manipulation.

The rand has been plummeting in recent times and reached an all-time low of R18 to the US dollar in January this year.

At the close of business on Friday the rand was trading at R15.89 to the US dollar, after rallying from R16.07 earlier in the day.

Read: Probe into collapse of rand begins

Wakeford, whose complaint led to the Myburgh Commission of Inquiry in 2002, said currency manipulation needed a multi-pronged investigation.

“The value of the rand is not a true reflection of the value of our national wealth or our market performance,” said Wakeford.

“The level of depreciation is abnormal. The rand should be approximately R8.50 to the US dollar. If you look at our overall economy, our debt is not near that of the US in proportion to the GDP.

“We are a fairly stable, organised and well-regulated economy.”

He called for the South African Reserve Bank and Financial Services Board to also investigate the currency market.

He said there were abnormalities in the economy and the regulators needed to find out what caused that.

He said the probe by the Competition Commission was narrow as it focused on anti-competitive behaviour.

“There is a strong chance of manipulation in the currency markets.

“What is needed is to prevent and deter delinquent behaviour in our currency markets,” he said.

He called for the Reserve Bank and Financial Services Board to investigate that.

The board referred enquires to the Reserve Bank.

The bank said it had launched a review of the foreign exchange practices in the currency markets with the board about two years ago.

The Foreign Exchange Review Committee issued a report in October last year, but could not find evidence of widespread malpractice or misconduct in the currency markets.

POLITICAL BUREAU

THE MERCURY

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