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South Africa and the Rand Jukka Valimaa & Phil Walker.

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Presentation on theme: "South Africa and the Rand Jukka Valimaa & Phil Walker."— Presentation transcript:

1 South Africa and the Rand Jukka Valimaa & Phil Walker

2 Why is the rising rand a problem? ANC support 60% Tripartite Alliance – COSATU – SACP COSATU Secretary General – "We will support the ANC to win the local-government elections next year, but we can't support people we definitely know are…unfit to be leaders. … If we can't get our way, why must we legitimise their campaign and give them a blank cheque?"

3 What could be done about it? 1. Lower interest rates 2. Quantitative Easing

4 Interest Rate (Nov 2010: Record low, 5.5%)

5 Inflation (very low, 3.4%)

6 Exchange Rate (very strong, 1 USD = 6.89 ZAR)

7 Next step: Change capital account balance By Tobin tax? No.  Eliminate apartheid-era restrictions on capital outflows

8 Questions?

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