Gordhan warns of 'currency war'

2010-10-14 11:11

Cape Town -  Finance Minister Pravin Gordhan said on Thursday the world was heading towards a "currency war" unless developed nations gave ground in negotiations at the Group of 20 (G20).

"Unless the G20 takes on the responsibility of getting major players to sit around the table to find a spirit of cooperation and generosity and give-and-take - which is what is going to be required to find a structural solution to the problem on a global basis - we are heading for what Mr Ortega, the Finance Minister of Brazil, correctly called a currency war," Gordhan said.

He was speaking in a presentation to parliament's joint meeting of finance committees.

He also said that data released since July point to slower economic growth in SA in the second half of the year.
Appreciation of the exchange rate due to capital inflows into emerging markets was reducing competitiveness and posed a risk to growth.

  • 10111 - 2010-10-14 11:18

    He watched cnn 3 days ago (that where i saw it) now he reports it to parliament.

  • Solo - 2010-10-14 11:27

    The Rand is a totally insignificant blip on the radar in comparison to the Dollar vs Yuan war. I suspect any efforts by our government will fall on deaf ears.

  • Vincent - 2010-10-14 11:30

    The minister needs to bring down the interest rate so that these foreign companies do not make money on the back of our high interest rates.

  • john - 2010-10-14 11:47

    Globalisation will eventually force all currencies to be 1 to 1.When you consider the cost of food in SA vs UK ,the rand is still weak.

  • FRANK - 2010-10-14 11:59

    Rand is not strong.Take food in SA,UK and US.SA's food is the most expensive ,so please tell me how can our curency be too strong

  • Pie in the Sky - 2010-10-14 12:07

    Our children in UK are shocked to see our food prices when visiting and we find the same when we bring back the Tesco till slips. Rand far to weak

  • adriaan - 2010-10-14 12:08

    if you like it or not,devaluation of the rand is unfortunately the only answer.

  • Scott - 2010-10-14 12:20

    Ensure that your seatbelts are fastened when the correction does take place

  • @frank & @john - 2010-10-14 12:21

    I dont know which one of you is the bigger idiot. But, ask yourselves the following question: Should food in SA be more expensive than UK and USA?

  • @10111 - 2010-10-14 12:30

    Pravin is still doing a better job than most members of parliament...stop being a negative critic but rather make positive suggestions...

  • Bullet - 2010-10-14 12:39

    I agree with you 10111. Pravin Ghordan is a fool and incompetent. He was only put there by his anc clowns to find new ways of ripping off the SA tax payer

  • Ripped - 2010-10-14 12:46

    The Rand is a very tradable currency.I built my business and lifestyle on it and it gives me great pleasure to buy sterling because the current exchange rate enables me to move the lot overseas. And I can buy more with my converted pounds!!!! Long live the Rand!

  • FRANK - 2010-10-14 12:52

    @FRANK&@JOHN-Considering we export all our top quality fruit,veg etc to the UK and we get second rate food here.Whos the idiot now.Yes our food should be a lot cheaper

  • Greg - 2010-10-14 13:25

    7 years of power growth will take place in strong emerging economies resulting in capital inflows causing the rand to keep strengthening. We unfortunately have to live with this and make the best of the situation. Developed economies are not attractive anymore or for at least the next decade they will not be attractive. There will be a dramatic and sudden correction in the future. We need to just be careful at all times.

  • Dan the Man - 2010-10-14 14:04

    Abolish exchange control, Mr Gordhan! Please level the playing field between the amnesty grantees who can keep ALL their loot offshore AND still live in SA, and the Honest Joes who have to EMIGRATE to be put in the same position. Talk about favoring the dishonest!

  • @ john, FRANK, Pie - 2010-10-14 14:13

    Or...that's not a currency issue, but a result of salaries being lower in SA, reducing costs in non-tradeables (Balassa-Samuelson effect)

  • Nasdaq7 - 2010-10-14 16:08

    Export competitiveness. But imports are cheaper. In any case just lower interest rates and the inflows will stop.

  • Fair Deal - 2010-10-14 16:41

    Any fool can criticise and most fools do. If you dont have a solution to offer then dont criticise the policy makers.

  • roguetrader - 2010-10-14 20:41

    This is a real currency war. US Fed chairman Bernanke, Treasury secretary Geithner and Pres. Obama are looking for war, and developing nations should fight fire with napalm. How? Pull off the "Singapore move" (that's why the USD weakened today) and tighten monetary policy, which will send the USD into Zim $ trash status, thereby causing China to offload US treasury notes. The developing world is slowly but surely overtaking developed nations in global economic terms. How long will we allow the USA to call the shots. I say we have the ammunition to stop Bernanke & Co. right now and send the USA into deflation mode (Bernanke's nightmare). Githner is crying about the USD/yuan peg, but hey - they can't get Americans to spend anyway, spurring the fear of deflation, so what are they worried about the yuan peg anyway? What, are Americans buying Chinese stuff instead of American stuff - apparently Americans aren't buying anything except autos anyway, so cut the b/s Bernanke and Geithner. Boycott the USA, developing world.

  • Kevyn - 2010-10-14 22:00

    If he wants the Rand to weaken ........ABOLISH EXCHANGE CONTROLS

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