Jacob Zuma: I was not responsible for rand’s decline

2013-06-14 08:51

President Jacob Zuma denied being responsible for the sharp decline in the value of the rand.

Responding during the presidency budget vote debate in Parliament yesterday, Zuma roasted opposition parties for linking his news briefing more than two weeks ago on the state of the economy to the depreciation of the rand, hours after he spoke.

“The fact is that markets were very volatile on the day of the media briefing on the economy,” Zuma said.

“Traders responded to news from the United States on quantitative easing, a form of very lax monetary policy in the United States. This led to the strengthening of the dollar,” said Zuma.

The rand plummeting was as a result of a stronger dollar and lower commodity prices.

Zuma conceded that labour unrest and the weak gross domestic product (GDP) would have added to the situation.

“There had been an expectation that growth would be between 1% and 2%. When the 0.9% growth figures were released, there was a sell-off of the rand,” he said.

Zuma warned opposition parties to steer clear of statements which could make matters worse.

Instead, parties should “put the country first” and work with the government to help build confidence in the economy.

The president said concerns in the mining sector, which has been hard hit by labour unrest, were being dealt with.

Deputy President Kgalema Motlanthe would meet players in the sector today to discuss disputes in an attempt to bring an end to the instability.

While there appeared to be some recovery in the mining sector this year, following a tumultuous 2012, it was far from out of the woods.

“It is for this reason that we place a high premium on restoring stability in the mining sector.”

Zuma asked opposition parties to support the government’s efforts to broker a peace deal between unions in the sector.

“The bottom line is that we should exercise caution when dealing with such matters, and avoid uninformed or loose talk that may exacerbate the situation.”

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