After weakening briefly in the wake of the mid-term budget speech, the rand as back to R7.44 per dollar, a rate at which our economy is going to find it very difficult to stage a strong recovery. Lower interest rates made no difference. Relaxing exchange controls didn’t bring about the expected rand-weakening capital outflows. Not even a raft of idiotic policy pronoucements by the likes of Julius Malema, coupled with turf battles between the left and right over who controls economic policy, have dented the currency. What to do now?
Short of firing Pravin Gorhan, making Malema minister of finance, and nationalising the mines and banks, the only answer is: more decisive intervention in the foreign exchange markets by the Reserve Bank. Buy, buy, buy dollars.