By Xola Potelwa
GRAHAMSTOWN, South Africa Oct 10 (Reuters) – South Africa’s
economic outlook is deteriorating rapidly, with unrest in the
mining sector and national transport strikes likely to lead to
job losses, central bank governor Gill Marcus said on Wednesday.
Speaking to economics students in Grahamstown in the Eastern
Cape province, Marcus also warned that the country faced a loss
of confidence, underlined by a sharp fall in the currency.
But she reiterated her stance that the central bank had no
target level for the rand.
A heavy fall in the currency on Monday to within a whisker
of 9.0 to the dollar had prompted market speculation of official
intervention. Marcus said it was simply too costly for a
medium-sized emerging economy such as South Africa to step into
currency markets.
“The daily turnover in the rand is around $25 billion
dollars, so if you want to look at where you can manage this
currency to, you’re going to whistle,” she said.
“We’ve got in total $50 billion dollars in reserves – not
like China which has trillions of dollars in reserves. They can
do these things.”
Two months of violent, wildcat walkouts in gold and platinum
mines, including the police killing of 34 strikers at Lonmin’s
Marikana mine on Aug. 16, have hurt South
Africa’s international investment reputation, Marcus said,
citing 5.6 billion rand ($638 million) in net equity market
outflows on Monday as evidence.
Continued…
