WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2008-05-09 Time: 00:00:00 Posted By: Jan
[You will recall that I mentioned that the Reserve Bank is desperately trying to keep the Rand from collapsing totally. That makes me think that we will see higher interest rates, even if it drives lots of people into bankruptcy. See: S.Africa: Interest Rates: Why the Govt LOVES high interest rates even if it drives masses of people & businesses into bankruptcy… and also: South Africa: The Interest Rate Hell… can interest rates go to 18%? Bad Debt is EXPLODING…
In Zimbabwe, since the time of international sanctions under Ian Smith, up to the present, the currency does NOT float freely like in South Africa. The currency was on the verge of collapse and so they instituted measures to officially control it. South Africa may be heading in that same direction in the long run.
So: If you can get money out of the country – GET IT OUT WHILE YOU STILL CAN. One day it might not be possible. Been there, seen it – and its nasty. Jan]
By Gordon Bell
South Africa should be prepared to intervene in the foreign exchange market to keep its currency stable and “competitive”, and should maintain its inflation targets, a group advising the government said.
In its report released on Thursday, an international panel – known as the Harvard Group – also suggested a budget surplus of between 1 and 2 percent to help ease inflation and for exchange controls to be scrapped.
The international panel, known as the Harvard Group, were asked to assess South Africa’s economic policies and propose ways to boost growth and cut unemployment.
| ‘Maintain the current inflation targeting regime’ |
“Maintain the current inflation targeting regime but adopt a strategy that pays more attention to the level and stability of the real exchange rate,” it said.
“This involves the use of SARB (South African Reserve Bank) statements on the exchange rate when it deviates from what the bank considers compatible with external and internal balance. In addition, it (SARB) should be willing to intervene to back up its statement.”
The group did not give a recommended level for the currency.
The Treasury stressed that the report, submitted in 2007, did not reflect government views and that it had neither adopted nor rejected any of the recommendations.
However, Finance Minister Trevor Manuel and central bank Governor Tito Mboweni have, in the past, dismissed proposals to intervene to influence the level of the rand.
South Africa’s rand has weakened by about 10 percent against the dollar this year to around 7,60, but had held firm for several years after plunging to an all-time low of 13,85 in December 2001.
The gains knocked exports and boosted imports, and helped push the current account into a large deficit. The shortfall stood at a 36-year-high of 7,3 percent in 2007.
The rand has also been sharply volatile over the past two years.
The report said fiscal policy should be used to bring down high domestic demand to allow the central bank to achieve its inflation target with a lower interest rate and a more competitive exchange rate.
“We recommend a larger fiscal surplus target for 2008. Given current conditions, it should be at least in the 1 to 2 percentage points of GDP…,” it said.
The Treasury has forecast a surplus of 0.8 percent in 2008/09.
The country’s policy of targeting CPIX consumer inflation at between 3 and 6 percent has come under fire, particularly from trade unions, who say it has led to excessively tight monetary policy.
The central bank has raised its repo rate by 450 basis points to 11,5 percent since June 2006 in a vain attempt to tame inflation. Annual CPIX jumped to a more than five-year high of 10.1 percent in March, raising the chances of more rate increases.
The report also proposed that all existing exchange controls be eliminated.
The Treasury has gradually lifted restricting on capital outflows and announced in February it would move to prudential regulations.
Source: http://www.iol.co.za/index.php?art_id=nw20080508163118586C894268