South Africa: Steering Rand is Easier Said Than Done, Governor

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Johannesburg — AT THE beginning of this month, Reserve Bank governor Tito Mboweni said he had instructed the Bank's staff to "cream off more dollars" from markets to rein in the rand, signalling a return to the controversial practice of currency management. As a result, reserves were likely to increase "quite substantially", he said at the time.

His idea of intervention is different to that of most people. At the time, local markets took his remarks with a pinch of salt, saying they may not point to real action. Yesterday's reserves data showed this caution was well- founded. True, gross reserves rose by a hefty 1,12bn to 39,1bn last month, in line with consensus forecasts. Gold reserves rose 231m due to higher gold prices. And the foreign exchange component soared 957m.

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