* Rand extremely volatile
* Exporters have blamed rand for poor performance
(Adds details, background, quote)
JOHANNESBURG Feb 8 (Reuters) – South Africa’s ruling
ANC is considering starting a sovereign wealth fund from
proceeds of a proposed new mining tax that could be used to
intervene in the market to cap gains in the rand currency in
times of a commodity boom.
Such a move would be a departure from current policy under
which the Reserve Bank does not actively intervene in the market
to target a level for the rand’s exchange rate.
A study on mining sector reforms submitted to the African
National Congress, a copy of which was obtained by Reuters on
Wednesday, proposed the introduction of a “resource rent tax
(RRT) of 50 percent” on all mining.
“The RRT proceeds should ideally be kept in an offshore
Sovereign Wealth Fund to ameliorate the strengthening of our
currency during commodity booms,” it said.
Manufacturers blamed the currency for poor export
performance when the rand gained about 30 percent against the
dollar in the two years to end-2010.
The rand subsequently lost about 20 percent in 2011 but
manufacturers have previously said they would like the rand
trading at around 8.50, compared to 7.55 last on
Wednesday.
The rand is a heavily traded currency that is given to wild
swings in line with changing investors’ sentiment.
Gross foreign exchange reserves of $51.45 billion at the end
of January do not give the central bank enough firepower to have
an impact in the foreign exchange market in which more than half
of trades on the rand are offshore.
(Reporting by Phumza Macanda)
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