‘No easy answer’ to rand strength – Marcus

2010-09-22 09:56

South African central bank Governor Gill Marcus said today there was “no easy answer” to deal with the strong rand currency which has gained around 25% against the dollar since the beginning of last year.

“The rand’s impact on manufacturing and exports is something that receives a lot of attention all the time. But it’s another thing to identify a workable solution,” Marcus said.

She added that dealing with the currency strength was not simple and even some developing countries were grappling with finding solutions to weaken their currencies.

Marcus also said South African banks will need to work on their liquidity to meet new proposed regulations under the planned Basel III series of banking reforms, requiring lenders to hold more capital and liquidity to avoid another financial crisis that then brings about massive taxpayer bailouts.

“Capital raising for our banks is not an issue. The real question for us will be liquidity,” she said.

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