Ed­i­tor’s View: Rand

The Star Early Edition - - BUSINESS REPORT - Adri Senekal de Wet

SOUTH Africa’s share price, the rand ex­change rate, is ex­pected to con­tinue its jour­ney to re­cov­ery. On Jan­uary 21, 2016, the rand reached a low of R16.86 against the dol­lar.

Since then, against all odds, the rand has im­proved by more than 342 cents, or 20.8 per­cent.

The main rea­sons: down­grad­ing avoided; im­proved ex­ports; lower cur­rent ac­count deficit; in­flow of port­fo­lio cap­i­tal; im­proved prospects for eco­nomic growth and a cred­i­ble bud­get.

This is noth­ing else than a vote of con­fi­dence in the abil­ity of the South African econ­omy to hon­our com­mit­ments to­wards the sta­bil­i­sa­tion of eco­nomic, fis­cal and mon­e­tary pol­icy.

The im­pact of these poli­cies will af­fect a stronger rand ex­change rate this year. The plat­form for a stronger econ­omy and a stronger rand ex­change rate is there­fore set.

Global cap­tains of in­dus­try, pres­i­dents of coun­tries and chief ex­ec­u­tives of multi­bil­lion fam­ily-owned busi­nesses (I was priv­i­leged to meet them with Dr Iqbal Survé, the chair­man of the Sekun­jalo Group) were highly im­pressed with the over­all pos­i­tive mes­sages Dr Survé pre­sented at Davos last week.

Deputy Pres­i­dent Cyril Ramaphosa, min­is­ters Jeff Radebe, Pravin Gord­han and Rob Davies, as well as Dr Survé and many other in­dus­try ex­ec­u­tives, con­veyed a strong mes­sage: “South Africa is open for busi­ness.”

An in­ter­view with Re­serve Bank Gover­nor Le­setja Kganyago dealt with the role of the Re­serve Bank “to pro­tect the value of the ex­change rate”. I would like to salute the Re­serve Bank Gover­nor for his am­bas­sado­rial con­tri­bu­tion dur­ing WEF 2017.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.