{"id":8522,"date":"2012-03-03T02:48:58","date_gmt":"2012-03-03T00:48:58","guid":{"rendered":"http:\/\/www.myza.co.za\/03\/s-africas-capital-flows-challenge-needs-fresh-thinking-cbank\/"},"modified":"2012-03-03T02:48:58","modified_gmt":"2012-03-03T00:48:58","slug":"s-africas-capital-flows-challenge-needs-fresh-thinking-cbank","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/s-africas-capital-flows-challenge-needs-fresh-thinking-cbank\/","title":{"rendered":"S.Africa’s capital flows challenge needs "fresh thinking"-Cbank"},"content":{"rendered":"

\t\t<\/span><\/p>\n

JOHANNESBURG, March 2<\/span> (Reuters) – South Africa needs
\nto set policies that aim to reduce the volatility of the rand
\nexchange rate as capital flows pose challenges to emerging
\nmarket currencies, central bank Deputy Governor Lesetja Kganyago
\nsaid in a speech posted on the bank’s website on Friday.<\/span><\/p>\n

<\/span><\/p>\n

“The capital flows challenge needs fresh thinking. Over the
\nmedium term, to moderate the real exchange rate, we need fiscal
\nand monetary policy settings that reflect that policy objective
\nand seek to achieve it,” Kganyago said in the speech to an
\ninvestor fund conference in Cape Town.<\/p>\n

<\/span><\/p>\n

Emerging markets are sensitive to exchange rate volatility
\nas near-zero interest rates of developed economies lead
\ninvestors to seek yields in the riskier but higher yielding
\nemerging market assets.<\/p>\n

<\/span><\/p>\n

“The impact on countries like South Africa is capital flows
\nto our countries looking for better returns and this poses a
\nchallenge for us, to manage the capital flows so that they don’t
\nlead to exchange rate misalignments,” Kganyago said in emailed
\ncomments.<\/p>\n

<\/span><\/p>\n

The rand gained about 30 percent on the dollar
\nbetween 2009 and 2010 but lost about the same amount between
\nAugust and November last year when it tumbled to a two-year low,
\nshowing its sensitivity to global risk sentiment. It is up 7
\npercent so far this year.<\/p>\n

<\/span><\/p>\n

Powerful labour unions, allies of the ANC led government,
\nhave bemoaned the currency’s strength, putting pressure on
\ngovernment to limit its gains.<\/p>\n

<\/span><\/p>\n

The central bank has previously ignored pressure to take
\naction such as taxing capital inflows like some emerging markets
\neconomies have done, saying they do not target a level on the
\nrand.<\/p>\n

<\/span><\/p>\n

Kganyago joined the policy setting committee of the Reserve
\nBank in May 2011 and was making the first governors’ speech for
\nthe year, which could signal the bank may be ready to rethink
\nits policy on the rand exchange rate.<\/p>\n

<\/span><\/p>\n

The European Central Bank on Wednesday announced a second
\nlong term liquidity injection, money that analysts say will
\nlikely fund carry trades, where investors use lower yielding
\ncurrencies to buy emerging market assets.
\n\u00a0 Continued…<\/strong><\/span><\/p>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

JOHANNESBURG, March 2 (Reuters) – South Africa needs to set policies that aim to reduce the volatility of the rand exchange rate as capital flows pose challenges to emerging market currencies, central bank Deputy Governor Lesetja Kganyago said in a speech posted on the bank’s website on Friday. “The capital flows challenge needs fresh thinking. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-8522","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/8522","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=8522"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/8522\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=8522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=8522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=8522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}