South African Reserve Bank (SARB) Governor Lesetja Kganyago says the rand has depreciated more than other emerging market currencies.
Kganyago was briefing Parliament’s Standing Committee on Finance on the bank’s annual report.
He says currencies of other Latin American countries have appreciated significantly due to tightening their monetary policies more aggressively in 2021.
Kganyago presented a graph that showed nominal rate of the rand and how it has depreciated significantly.
“The panel right in the grey bars just shows the effective exchange rates of other emerging market economies and you can see with the exception of Argentina, Turkey and Russia, we have one of the most depreciated currencies. The other two countries being Malaysia and China that have got mild depreciations. Otherwise, the emerging markets universe have actually seen their currencies appreciating during the course of this year. Part of it the most appreciated in the Latin American countries. The common denominator here is that those Latin American countries, started to tighten monetary policy far more aggressively in 2021 than other emerging markets.”
Annual report and presentation:
Meanwhile, Kganyago says South Africa’s public debt is expected to continue rising instead of declining.
He says National Treasury is expected to shed some light when the Medium-Term Budget Policy Statement is tabled in October.
“On the right side of the panel is the Treasury’s projections of what would happen to public debt. The National Treasury at the time of the budget is the blue line which you can see picks the line in 2025 and declined. But the IMF’s update in the recent World Economic outlook in April actually thinks that the debt will continue to rise and that we would not have reached the peak as yet and I’m sure the Treasury would deal with that when the MTBPS is presented.”
In related video below, rand hits a new low: