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Pretoria - The euro is likely to survive 2012 despite the
debt crisis in the euro currency zone, International Monetary Fund (IMF) MD Christine Lagarde said on Friday.
European leaders will hold another summit this month to try
to resolve the crisis which threatens the survival of the single currency 10
years after it went into circulation.
“Will 2012 be the end of the euro currency? I seriously
don’t think so. It's a young currency, it's a solid one as well,” Lagarde told
journalists on a visit to South Africa.
“You have within the zone, not in relation to the currency,
serious pressure and issues concerning the sovereign debt, concerning the
strength of the banking system, which are being addressed. But the currency
itself is not one that would vanish or disappear in 2012, not at all.”
Lagarde, in South Africa as part of her first tour of the
continent since taking the IMF post, reiterated that the fund would likely
revise downwards its 4% growth forecast for the world economy in 2012.
Emerging markets such as South Africa have borne the brunt
of global risk aversion triggered by the eurozone crisis, with the rand
falling nearly 23% against the dollar last year.
Finance Minister Pravin Gordhan said more
action was needed globally to address currency volatility resulting from the
eurozone crisis.
“Clearly the current weakness in the currency is beneficial
for exporters but has the flip side effect of inflationary pressures which the
Reserve Bank has to actually deal with,” he said.
