{"id":10489,"date":"2012-05-04T08:34:19","date_gmt":"2012-05-04T06:34:19","guid":{"rendered":"http:\/\/www.myza.co.za\/05\/safricas-cbank-says-costly-to-intervene-in-fx-volatility-ft\/"},"modified":"2012-05-04T08:34:19","modified_gmt":"2012-05-04T06:34:19","slug":"safricas-cbank-says-costly-to-intervene-in-fx-volatility-ft","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/safricas-cbank-says-costly-to-intervene-in-fx-volatility-ft\/","title":{"rendered":"SAfrica&#8217;s cbank says costly to intervene in FX volatility-FT"},"content":{"rendered":"<p>\t\t<span><\/span><\/p>\n<p><span class=\"articleLocation\">JOHANNESBURG<\/span> May 3 (Reuters) &#8211; South African central bank<br \/>\ngovernor Gill Marcus said on Thursday it would be costly to<br \/>\nfight the volatility of the rand through direct intervention.<span><\/span><\/p>\n<p><span><\/span><\/p>\n<p>Emerging markets are seeing greater exchange rate volatility<br \/>\nas near-zero interest rates in developed economies lead<br \/>\ninvestors to seek yields in riskier but higher yielding assets.<\/p>\n<p><span><\/span><\/p>\n<p>&#8220;So what can be done? Direct intervention is one option,&#8221;<br \/>\nMarcus said in an opinion piece published by the Financial<br \/>\nTimes.<\/p>\n<p><span><\/span><\/p>\n<p>&#8220;(But) with average daily turnover in the domestic foreign<br \/>\nexchange market of about $16 billion, trying to lean against<br \/>\ncurrency moves would require a lot of costly intervention.&#8221;<\/p>\n<p><span><\/span><\/p>\n<p>South Africa&#8217;s gross foreign currency and gold reserves &#8212;<br \/>\nwhich would provide some of the firepower needed to reduce rand<br \/>\nvolatility &#8212; stood at nearly $50 billion at the end of March.<\/p>\n<p><span><\/span><\/p>\n<p>Marcus also said lowering interest rates was not an option<br \/>\nbecause the inflation rate was already too high in Africa&#8217;s<br \/>\nbiggest economy.<\/p>\n<p><span><\/span><\/p>\n<p>The central bank targets inflation of between 3 and 6<br \/>\npercent. Headline consumer inflation slowed to 6 percent in<br \/>\nMarch, returning to the target band for the first time since<br \/>\nNovember.<\/p>\n<p><span><\/span><\/p>\n<p>The rand gained about 30 percent on the dollar<br \/>\nbetween 2009 and 2010 but lost about the same amount between<br \/>\nAugust and November last year when it tumbled to a two-year low.\t<\/p>\n<p> (Reporting by Tiisetso Motsoeneng; Editing by Myra MacDonald)<\/p>\n<p><span><\/span><\/p>\n<p class=\"copyright\">\n<p>         \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":"<p>JOHANNESBURG May 3 (Reuters) &#8211; South African central bank governor Gill Marcus said on Thursday it would be costly to fight the volatility of the rand through direct intervention. Emerging markets are seeing greater exchange rate volatility as near-zero interest rates in developed economies lead investors to seek yields in riskier but higher yielding assets. 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