File photo: Siphiwe Sibeko.
File photo: Siphiwe Sibeko.

Rand forex probe may stem from ‘confession’

By Renee Bonorchis Time of article published May 26, 2015

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Johannesburg - An investigation by South Africa’s anti-trust regulator into alleged foreign currency manipulation involving the rand may stem from a whistle-blower or “a confession”, a central bank official said.

The Competition Commission informed the central bank of its investigations without sharing details of the probe, South African Reserve Bank Deputy Governor Kuben Naidoo told reporters on Tuesday in Johannesburg.

“We have spoken with the banks and asked them to co-operate fully with the Competition Commission,” Naidoo said, as the central bank’s bank supervision department released its annual report for 2014.

The commission said on May 19 it’s investigating 11 entities, including local banks Standard Bank Group Ltd, Barclays Group Africa Ltd and Investec Ltd for alleged collusion in trades involving the rand. Finance Minister Nhlanhla Nene said on May 22 he was “very concerned” by the allegations and wanted to understand the impact on the country’s financial system.

The central bank’s own review of foreign-exchange trading is under way “and we haven’t found anything untoward in South Africa”, Naidoo said.

The Competition Commission hasn’t spoken to the banks involved in the investigation, it said on Monday.

‘Gathering evidence’

“We don’t have to be in touch,” Mava Scott, a spokesman for the commission, said by phone from Pretoria. “We are under no obligation. Right now we are gathering evidence. Once we come to the conclusion that someone has a case to answer and we have enough to prosecute, then we will go and speak with them.”

Given the high-profile nature of the investigation, the commission has committed to working on it as fast as possible, Scott said.

Spokesmen for Standard Bank, Investec and Barclays Africa have said their banks will co-operate fully with the investigation. BNP Paribas SA, Citigroup, Citigroup Global Markets (Pty) Ltd, Barclays Bank PLC, JP Morgan Chase & Company and a unit of Standard Chartered PLC were also named in the probe.

Naidoo said at Tuesday’s briefing he didn’t know if the rand exchange rate had been manipulated. A misdemeanour may have affected the currency’s price and it was essential that people in the market have the confidence that the market is fair, he said. The extent of any malpractice wasn’t yet clear, he said.

“My sense is that the investigation is as a result of a whistle-blower or a confession,” Naidoo said.


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