Sarb cuts interest rates by another 100 basis points

Watch the MPC media briefing.

The South African Reserve Bank (Sarb) announced a further 100 basis point cut to the repo rate on Tuesday, following an emergency meeting of its Monetary Policy Committee (MPC) in the wake of a worsening economic fallout from the global Covid-19 pandemic.

This brings the repo rate down to 4.25%, its lowest level since 1973. It will result in SA’s prime commercial lending rate dropping from 8.75% to 7.75%.

The move comes less than a month after the Sarb announced a 100 basis point cut at its last MPC meeting on March 19.

Read: Repo rate slashed by 1%

The announcement made on the bank’s Twitter account also comes as the Minister of Finance, Tito Mboweni, is set to address media about the recent rating downgrades by Moody’s and Fitch which are expected to have a severe impact on public finances. 


Delivering the emergency monetary policy statement on Tuesday, Reserve Bank governor Lesetja Kganyago, said since the March meeting of the MPC, the Covid-19 pandemic had spread globally, with its impact being felt through all economies.

“Current estimates from the International Monetary Fund show global growth contracting by about 2.9% this year. Economic contractions are expected to be deepest in the second quarter of 2020, with some recovery expected in the third quarter of the year,” he said.

He warned that the Covid-19 outbreak will have a major health and social impact, and “forecasting domestic economic activity presents unprecedented uncertainty”.

Kganyago said in light of this the Sarb now expects South Africa’s 2020 GDP to contract by 6.1%, compared to the -0.2% expected just three weeks ago (at its last MPC meeting in March).

The Sarb expects SA’s GDP to grow by 2.2% in 2021 and by 2.7% in 2022.

Independent economist, Mike Schüssler, told Moneyweb that the rate cut takes the repo to a record 4-year low.

“The last time the repo rate was this low was in 1973, but the real shocker is the Sarb’s latest prediction that the economy will contract by 6.1% in 2020,” he said.

“Such a contraction in GDP, will mean it will be SA’s worse economic performance since 1931,” Schüssler pointed out.

Read: Sarb announces new liquidity measures to support banks

“South Africa’s lockdown has been extended by an additional 14 days, bringing the total lockdown period to 35 days. Both the supply and demand effects of this extension reduce growth and deepen it in the short term, as businesses stay shut for longer and households with income spend less,” said Kganyago.

“This will likely also increase job losses, with further consequences for aggregate demand. The impacts will be particularly severe for small businesses, and individuals with earnings in the informal sector,” he added.

Read: Lockdown: Sarb foresees 370 000 initial job losses, 1 600 business insolvencies

In its briefing on Tuesday, the Sarb did not give an updated forecast on job losses as a result of the Covid-19 economic fallout. However, at its recent Monetary Policy Review meeting, the bank noted that up to 370 000 jobs could be lost as a result of the initial 21-day lockdown alone.

Meanwhile, following today’s repo rate cut, the rand lost more than 1% against the US dollar. The local currency was trading at around R18 to the greenback when markets opened, however, it weakened to R18.31 by 13h00 time.

Read: South Africa’s rand dips after surprise rate cut



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What is this going to help? Rather raise it by 100 basis points.

Agreed. Who is making these decisions? The Reserve Bank or some other political influence?

Lol some of you… Do u understand the impact of this? Everyone is getting a haircut… Rental prices are dropping, salaries are dropping… In reality there aren’t so many Rands flowing in the system.

The reserve bank needs to do more and so does government

For sure. We might br heading for deflation!

You are an incompetent. This increases cash flow in the economy! With cash in your pocket you can do and buy things. If you don’t have cash then sit at home.

You are an incompetent. You have no idea what you are talking about.

I agree. The interest rates should be raised not lowered. These idiots are punishing savers and pensioners who rely partially on savings via fixed deposits to generate some passive income. I suggest to everyone to dump the Rand by purchasing Kruger Rands. So far my return is over 75% in Rand terms on my Kruger Rand purchases through FNB. With interest rates so low I am not going to put anything in Rand based investments or fixed deposits.

Welcome to the new normal of low interest rates, if ever to be raised again. Good luck to SARB to try to raise rates again, rather lower in future.

This is madness. Bond rates have been rising which is a signal to raise interest rates not lower them. What the SARB is doing is feeding the speculators the wealth of the nation. One can now expect a lot of short rand positions to be taken. Borrow billions of Rands in the RSA, dump them on the forex market, move the money overseas and collapse the Rand. Overseas investors in SA panic and exit thus fuelling the rout. When the R/$ exchange rate exceeds 25R/$, the speculators close out their short positions at a much cheaper exchange rate making billions on the backs of South African workers and impoverishing millions. The poor are going to be whacked the hardest when inflation rockets and basic foodstuffs are unaffordable. Absolute folly. The ANC is not on the side of the indigent.

Well said Great Richard: Problem is that abot one in a Million understand what you are saying :
We encourage saving then nail the poor sod (Pensioner) who planned for retirement , meanwhile he is funding the Sods who take massive Loans whilst driving fancy cars : WRONG decision.

There is nothing wrong with what was done. Your wealthy clients are the ones benefiting when the rates are increased because 2% of a R100mil is R2mil which is money to go and enjoy on luxury items while the rest of us who have a car and a house in a complex have R3000 more in our pockets from these cuts which goes a long way. I’m not suprised you are mad…sit down and understand that this in the SHORT TERM is in the best interest of the rest of us who gross <R1mil. You might be losing clients but the rest of the population can put an extra litre in their cars and bread on the table

Thank you

Exactly, they should hold steady to protect the inflation rate and take away the speculation.

…and SARB just printed ZAR500bn with virtually ZERO production…based on the “need” they will probably print more.

Let’s see where inflation heads from here-forth…

Yip. They will make the poor pay for the crisis

We need growth in this country. Not high interest rates to keep the currency at a stable level. The level will stabilise once growth returns. People have more confidence in South Africa under Cyril, they are waiting on the sidelines to see growth. Once growth comes the rand will strengthen.

And go ask Australia and the UK why they dropped interest rates to 0.15%

Certainly will help the indebted but will be devastating for savers and the elderly.

This will not stimulate the economy because there is no economic certainty !!!

It takes a special kind of thinking to lockdown an economy and stop production and then stimulate at the same time. SARB can create Rands and manipulate rates but it cant create wealth. There are only three ways to consume 1. Live off savings 2. Borrow 3. Take from others
Government along with the majority of citizens only consume by borrowing and taking from others.

That which government borrows and distributes to the majority of citizen will have to be paid back by the minority. Which is the same as taking even more from others.

this is an enormous transfer of wealth from the prudent to the profligate.

there is only one thing one can do – take all your money offshore as quickly as possible.
they are frightened of deflation which is why they are doing these crazy things.
Also you can lower interest rates to zero – it still does not help the guy who lost his income. He still cannot pay his mortgage or car installment.
It will also squeeze the bank’s profit margins causing other hazards. These guys with there freaking models are incabable of coming up with anything innovative and new. Just parrot the same old BS being thrown around all over the world

Bank margin continues to be 3.5% and will soo be 50% of interest most other countries the bank margin is much more narrow.. but let’s not talk about that hey.

Good for us normal consumers. Bad for all the fund managers in the rest of these comments. We are fighting survival at the moment and to stretch our money on basic needs and not pushing margins with our customers. This was the least the SARB could do.

Another gift to the gold and offshore investors.

Heads you win, tails you win again. Keep the silly stuff going SA government! Financial stocks didn’t budge today because nothing changed.

You can cut interest rates to zero.. banks still won’t lend, stimulus won’t come through.

Oh Really Richard the Great

Please explain the following to me:
Do you really think that the SARB is not well aware that local interest rates ‘’eventually’’ will have to go up- as a direct result of the Moody’s Junk downgrade that we had? Foreign Funds will have to (under their laws that they can only invest in countries etc. with investment grades). New local loans will have to be taken out to replenish the funds that have so far left and will be leaving in the future.
What is happening now on short term interest rates – is in the ‘’Corona Virus’’ now! Read the plethora of articles to this effect all over the Internet! In case you haven’t noticed, we’re headed to an era where the separation of fiscal and monetary policy doesn’t make sense anymore, and I think we should prepare ourselves for another 3 or 4 similar cuts – Quantitative easing – that is what we are seeing – that is what we all need right now!
This is not madness – most people in this country are now in dire financial straits – maybe only the ‘’fat cats’’ don’t feel it.
Ag please – ‘’ the SARB is doing is feeding the speculators the wealth of the nation’’ – what wealth?
In case you didn’t know – it’s against Exchange Control to borrow ZAR and to convert to foreign currency to be invested offshore – even if you try and use your ‘’Uncle in the furniture business’’ to try and do the transfers for you – the SARB surveillance department will have you with Oscar very soon! Take your short Rand positions in sunny SA – but beware – don’t speculate – you can only do that if you have got a ‘’firm ascertainable commitment’’ to do that – even with any form of ZAR/Foreign Currency dynamic hedging!
Foreigners are not busy doing much ‘’carry trades’’ at the moment anyway – they are also ‘’corona’’ skeptic and neutral at the moment – what they do in the offshore markets and the risk that they are running there in ZAR/Foreign currencies – are their prerogatives – that’s the way the market has always been anyway!
In case you haven’t noticed: The bond market had dried up completely, there were no buyers in sight, just sellers. The bond market has been short of buyers since February, while daily sales of sovereign debt have regularly topped 4 billion rand ($230 million), including a record 12.8 billion rand on March 2. The SARB about two weeks ago launched a bond-buying program, seeking to drum up demand in credit markets as the coronavirus epidemic weighs on the country’s already ailing economy.
Inflation targeting: Most emerging market countries all over the world – that started like us in 1995 – had one thing in common – weak local currencies, high money supply, high growth and high inflation – that is how they started – BEE killed that but I think that is what we should start preparing us for.
Ag please – ‘’ much cheaper exchange rate making billions on the backs of South African workers and impoverishing millions’’ – Fact: A weak USD/ZAR exchange rate right now is exactly what this country needed, as local manufacturers cannot compete with the Chinese products that are imported under a strong USD/ZAR and other major currencies – likewise, the local manufacturer also cannot compete in the offshore markets as he doesn’t receive sufficient rand for his exported products.
It’s a myth that countries like sunny SA cannot survive under a non-investment grade and a weak exchange rate – Exporters (who will employ those unemployed workers) will now be in a position (for the first time in many years) to employ and produce – leading to an export-led recovery in the long term.
PS: I happen to know the SARB Governor (Lesetja Kganyago) – from our FX Treasury working days in the nineties – he is a very Astute person and the right person to make the ‘’big calls’’ in conjunction with his committee!

The Governor of the SARB is the epitome of excellence. Take note- that is excellence per se, not like in “black excellence” which is not excellence at all, but merely a badly-disguised attempt at looting, like in the EFF/ VBS Bank scandal.

So, the Governor is not an example of a particular colour of excellence as in “black”, “white” or “brown”, but of excellence per se – that is the only kind of excellence there is, because any form of performance that is connected to racial undertones is simply personal inferiority complexes or stupid greed, manifesting as identity politics.

Please be more spesific – do you know him?

@ Richard: Are you getting the education? It’s for free no one is charging you a cent, but read and learn. That’s what this forum is for… thanks comme ci comme ca, much appreciated.

….drivel ….the elephant in the room is the inflows of Forex when traded with the ZAR

This activity enables the country to hedge ZAR against Forex inflows, which in turn enables revenue on tap to import crude and other essential resources

SA is not a global power house economy. It might be a power house when peered against Chad, Zim or Burundi…
So Forex inflows are actually essential and that is the point being made

Really, comme ci comme ca?

“It’s against Exchange Control to borrow ZAR and to convert to foreign currency to be invested offshore” Please quote me the statute that says it is against the law to borrow in Rand and invest overseas. As far as I know there are no such laws regarding FOREX trading in ZA apart from R10 million for individuals, annual allowances, SARB approvals and the usual KYC (call it KFC) money laundering melodrama.

Be that what it may, there are other ways to short a currency and you cannot deny that given weight of numbers these become self fulfilling prophecy. For example, there is no restriction on westerners purchasing futures currency contracts. One can also sell a currency index far removed from anywhere in Africa.

If you think that debasing your currency is a good thing then consider this: no country has ever gotten rich by debasing their currency or hyperinflation. Citizens of countries like Venezuela and Zimbabwe suffer whereas the Japanese and Germans prosper. In 1968 one Rand purchased US$1.30. Now it will buy about $0.05. The dollar has depreciated a lot as well (from $35 per Oz gold to $1700). All that depreciation and impoverishment of workers should have made the RSA an economic powerhouse. It didn’t. What went wrong? Your argument is fatally flawed. Never has the regime been able to contain the inflationary surge that accompanied the debasement. Any benefits are most certainly very ephemeral. Workers notice their declining standard of living and demand more. Secondly, your argument ignores the marginal terms of trade i.e. the ratio of additional imports to additional exports. You are ignoring the change in additional imports that the unit of exports will buy. South Africa now has to export more to maintain the same level of imports. SA has to pay more for the ingredients used in manufacturing such as all those components in cars that are not made locally. Clocks, radios, speakers, dashboard, electronics, ignition systems speedos, tachometers etc. This leads to larger BOP deficits not lower deficits.

South Africa is not the USA. In the latter newly created helicopter money go straight back into the bond market, driving interest rates lower, creating more deflation. In South Africa it is spent on goods creating inflation.

You may be acquainted with the SARB governor and think he is astute. Good on ya. When the helicopter money has played out and basic necessities are not affordable for the poor, maybe we can talk again?

My final comment: do you ever wonder what sets an upper limit on interest rates? Why don’t interest rates carry on rising? The answer is simple: the marginal productivity of capital (MPC). Bond rates are the marginal productivity of capital. At the moment bond rates are very high. This means the marginal productivity of capital is high. People would rather sell their plant and equipment (or not buy any more) and invest in bonds. Put tautologically: the the opportunity cost of carrying capital stock becomes critical for the manufacturer. Now with the currency debasement, interest rates are set to rocket along with the MPC. This is catastrophic for manufacturers. Compare the short and long term bond rate spread. Does this not tell you something?

Well timed move SARB… I still expect a zero percent repo rate by year end… let the people borrow and spend. Let the machinery of SA inc. fire on all cylinders as it did after 1994 elections. Breaks will be applied when the momentum is to high… that is 5 years hence… banks have nothing to lose the still get their margin above the repo… Savers continue to save, more over you have more extra cash to save… we will see you on the other side… Alluta Continua, contra fermo.

Boombang : You are clearly not Firing on too many Cylinders : Stop embarassing yourself .Kind Rgds

No I am not… my utopia is zero percent repo and that we shall have… then I and the great country RSA will fire on all cylinders. Nine provinces, eighteen cylinders because this country is V18 in waiting.

I think Lesetja has proven himself to be cautious,and he did say before he will only unleash emergency monetary tools should the need arise.

This are unprecedented times and calls for unprecedented measures,SARB certainly wont hesitate to reverse this extraordinary measures as soon as the storm abates and intrest rates will return to equilibrium.
This is not an ideal time to sound smart.

This is a seriously complex issue with MANY touch points and arguments that can go both ways.

The reality is that our interest rates are much higher than the rest of the world. It impacts our ability to grow. Between interest and tax, there just isn’t much left.

I think this is a great move.

Yes, the rand will lose more value (Although we are already way undervalued anyway, maybe we are close to the bottom)

But a strong rand is IS NOT EVERYTHING. Maybe we STOP importing and our labor will be more competitive in dollar terms. We must stimulate and produce locally , now is that time.

If you are in the import business, things will be tough, but if you are savvy and entrepreneurial , actual build something here, locally. Do it with low cost of debt and lets rebuild our economy.

With the gold price getting closer to $2000 and the rand weakening, we can export gold and make killing.

Lets look for opportunities and find solutions.

Reducing the rate punishes savers who provide the capital to lend out. True, we all have to take a haircut but pensioners should get a tax break to compensate. They cannot go to work to recurate the loss. It woud be better to give ALL South Africans a cash injection by exempting more foods from VAT, reducing personal tax for employees and throwing insolvent S O E’s to the wolves to balance the books.

The pensioners argument comes up every single time the rates go down.

Sure the last while wouldn’t have been great for them , but had they invested in RSA gov bonds , they would have been smiling.

Probably the lowest risk asset class , now giving very healthy returns.

I feel for pensioners , but they are a small portion of the current economy, and the economy needs a bail out , else we all suffer.

Best one gives your parents a helping hand , it’s the least you can do in these times.

The irony of the pensioners’ argument is that always non-pensioners seems to be the spokespersons not even a single pensioners has spoken on 1st person bases and said “I am suffering because of 1,2,3….”.

Why are my comments moderated, is it because I am from Parow ? Somebody must live here, hey, don’t discriminate.

…I suspect MW’s moderator is either a Blue Bulls or Sharks fan, unfortunately 😉

Yaa. Hey! just say Magnus was right.

If i may add my 2cents. South Africa was well and truly in trouble before this peculiar little covid 19 came along and the worlds leaders, for reasons we can not yet fathom and they have not yet shared – decided to shutter the world global economy.

Anyway – South Africa has a massive export industry and needs to take every little advantage it can muster in generating exports and that will mean CREATING JOBS. Look at gold currently over R1 million a kg! The SARB is not quoting expected job losses, but it does not take a rocket scientist to anticipate that they will likely be upwards of 1,5 million. Which industry/ies pray tell can step in and pick up that slack or a large chunk of it, if not the export mining industries and export producers – NONE! The local demand side of our economy has just evaporated. There is always a market for metals and minerals – especially now as global confidence in governments crumbles.

The price crashes in a lot of commodities will be short lived and even if they are sustained in some industries like Bauxite. RSA has the lions share of PGM metals, we have albeit a smaller share of gold, but manganese we have huge room there. Look at the ZAR it just plummeted 35% yet the fuel price fell further internationally, so imports should be the last thing on our minds for now, they will be cheap for some time, especially oil and as such all products oil related. But Soya Beans are trading at records on SAFEX and in Brazil.

25 to the USD bring it on, in the long run a sustained very weak currency is not good – however, in the short term as in 2-3 years it can be a GOD SEND – if you do not believe me go and look at the SOUTH EAST ASIAN economies after the LTCM debacle in the late 1990s. Those currencies were ravaged by speculators and hedge funds – but look how those TIGER economies came roaring back BECAUSE OF VERY WEAK CURRENCIES – they literally exported their way out of trouble and when stable they re-introduced stricter controls and fiscal responsibilities required. While the world shutters many factories due to zero demand – they will look all over for countries like RSA for building cars – with a ZAR and the MIDP we could be the car producing choice for the next 5-10 years by default – our mines and secondary industries that the motor and mining industries support can assist in mopping up the hideous job losses – even maybe employing more than was lost at better ZAR and USD equivalent salaries, assisting in kick starting our demand side economy again locally – to me this is the best stimulus available to SA at the moment – we are one of the luckiest countries on the planet to have the massive export industry we do, with almost unlimited growth potential – ESKOM willing.

I would also refuse an IMF bailout as that would kill us with the attached austerity measures – we do not need it, we have the pensions funds if we absolutely must, but rather masters of our own destiny than controlled like puppets from Brusssels.

I’ll just extract two of your jokes. One, “the car producing choice”. SA cannot produce cars efficiently; as it is every car exported is subdsidised by the taxpayer. and local buyer. Two, “refuse an IMF bailout”. If a country cannot meet its debt obligations, the only option is the IMF. The IMF does not come begging for SA to take its money; it is the other way around. Time will tell whether the begging bowl is put under their noses. It may well be.

Car manufacturers receive the third biggest tax break after vat exempted food and pension fund contributions. Do you really think SA would be competitive in this compared to elsewhere without that?

Has SA industrialised more or less with the exchange rate weakening from parity to the dollar? Why do you expect it to happen now!

As per the norm, demonstrated by any and all of our public institutions and affiliates. Their forecasts/predictions seem far to optimistic.
It’s obvious that these people live in a different realm from those of us on the ground.

“The only function of economic forecasting is to make astrology look respectable” Kenneth Galbraith, Canadian economist.

Smart man…lol!

With the Rand declining and a loaf of bread costing R100 where in heavens name are the plus 50% unemployed going to find that R100 to buy a loaf of bread?

But not from the government pensioners. They are counted on top of the 50%

Richard the Great

Even the guy selling the newspaper knows about the ZAR 10 million allowance etc.
You made the snotty remarks and accused the SARB etc.
Here is the challenge: You tell me which Bank (and the name of the FX and or Corporate Trader that are going to pay away from the foreign currency – with borrowed Rand without a ‘’firm and ascertainable commitment’’ – and I will report it to the SARB’s Surveillance Department!
Yes, the Banks will KYC you (they most probably know already!). Don’t get too blasé about money laundering – you won’t be the first Stock Broker, Accountant, Asset Manager, etc. that gets sorted out!
Your Westerners remarks: Have you actually read my comments with regards to ‘’trading offshore’’ etc. Let me help you – I said ‘’ what they do in the offshore markets and the risk that they are running there in ZAR/Foreign currencies – are their prerogatives – that’s the way the market has always been anyway”. I have been trading in FX Treasuries and Corporate Treasuries both in SA and offshore for more than 45 years- now retired. I think I know the market, its risks, and rewards inside out.
You can trade in the ZAR futures ‘’ mom and pop shops’’ – as much as you like. That is also not what you said at first – you were alluding to big bond-buying/selling and investing foreign currency offshore – just get the info from the Bank(s) that are involved in that.
For the record, I was working in the SARB’s Gold and Foreign Exchange Department when the US abandoned the Gold Standard. We had to start (manually in those years) valuing (mark-to-market) all the bank assets (Gold and Foreign currency) etc. The Rand Gold was R 23.80 per fine ounce. Have you ever being to Germany and Japan – they are the First world and does prosper – we are emerging market and we will never ever ‘’get rich’’.
One Rand was worth US$1.40 from the time of its inception in 1961 until late-1971. In June 1974 the South African authorities decided to delink the rand from the dollar, and a policy of independent managed floating was introduced. Ask me I know – I was there!
What happened mate – Apartheid screwed up what wealth we had together with all the corruption of the new regime – period!
I don’t care a sod what you think about my arguments etc.
We have been at the crossroads for some time and we don’t have a choice right now – and after the market collapse, maybe in many years to come…
In South Africa, we have never and will never live in a first world country – or a perfect world. Inflation should now be back on the backburner etc. There are other critical issues that should be dealt with first. Employment and jobs – at all costs now!
I never liked the so-called Carry trades – as we are exporting short term Dollar/Currency funds in the form of interest rates – but we don’t have a choice –it is what it is. We are not at Lalaland yet!

I am in daily contact with a couple of old FX colleagues etc. all over the world. I had two calls this afternoon from them ( London and Frankfurt) and they all agreed with my views as expressed under my pseudonym.

I am looking forward to hearing from you and getting the information – if not, I rest my case!

Regarding borrowing money and moving those borrowed funds offshore, all from the same bank (FNB in this case): I can easily either use my credit card (R250k+ available) to transfer to my cheque account or take out a personal loan or revolving loan and move that money to an offshore bank account of mine using the digital platform. Of course I could simply use my own cash but the exercise works with borrowed funds too. This is beyond easy as part of R1m SDA and no questions get asked from the bank. To move more offshore (up to R10m extra), I can easily use my cash balance or loan-increased balance, apply for tax clearance from SARS and move the funds offshore, once again using FNB’s digital platform and zero issues from SARB or your best friends at the Surveillance Department. If you want to report this, the trader at FNB’s name is RB Jacobs, you can speak directly to him on his Twitter line. I don’t know what sophisticated exchange controls you think we currently (strict yes) have but it’s beyond easy to move borrowed funds abroad, as long as they originate in your own account, thereafter it gets a little more admin intensive. Please don’t come with another long rant of who you know, where you worked, what things were like in the 1940s,etc. I can do the same exercise with Standard Bank and their digital platform and Absa too, so easily. Oh yeah, Investec as well.

You are talking about peanuts!

Give me the big numbers that your mate is talking about!

Maybe you should go read the Money Laundering laws – If you suspect anybody of contravening – and you don’t report it, you are liable as well. I don’t need mates in surveillance to report it – its a simple process

cccc that is not how the law works. Under South African law there are very few instances where not doing something constitutes a crime. Certainly observing criminal activity and not reporting it is not a criminal offence. If I see a child drowning and do nothing to save it assuming I could, does not make me a criminal. A bad human maybe, but it is not a crime. There are a few exceptions, for example if it is your job e.g. a lifeguard. State versus Ewals would be another. It is the job of a senior officer to see that the police underlings do not beat up the prisoners. Of course, not filling out an income tax return could be another. The question that the court would ask is if it is your job to ensure that the money laundering does not take place and you knew of it.

It’s very simple. There is an onus to report. In 2014 I was based in the European office of a Fortune 200 were I was involved in the reporting of a South African for a fraud offence committed in a third party country in Africa. The only nexus with South Africa was the citizenship of the offender. The SAPS and the NPA took on the case.

Don’t be ridiculous. Please try to reply to my comments i.e. where they are not elsewhere in the abyssal depths of the Moneyweb Marianas trench.

I am still waiting for the statute that says it is illegal to speculate in Rand foreign currency positions specifically borrowing money to invest overseas which is not the same as money laundering. Not even a little bit the same. South African Forex controls are like a leaky sieve. Forex controls don’t work. The ANC is corrupt to the core. Ask your mates the Guptas if you don’t believe me. They were holed up in Delhi last time I heard.

Your arguments sound like a narcissistic argument to authority. “I did this, I did that so you’d better believe me- I have met the guvvna of the SARB” “I have old mates in London”. Cuts no ice, I’m afraid.

Speculating in currency movements is risky for individuals – I do agree. To “derisk” (hate the word) it one has to have a little bit of muscle like a bullion bank or a number of them. The risk is simply that the currency will move against your position. If enough speculators band together shorting the Rand, and shake the tree, overseas investors will panic. This has happened before- many times and not only with the ZAR. During the 1990s borrowing in Yen @0.5% and investing in US$ Treasuries @5% was a great carry trade. You even got to pay back your loans super cheaply. Poor Japan trying to reignite their economy with low interest rates to have two decades of recession. The only options SA has are throw the Forex reserves at the speculators, raise interest rates or let the rand crash. Instead the SARB invites them in for breakfast (that would be the average SA citizen on the menu). R0.50 extra to buy one US$ in the last 24 hours. The fact that such a situation exists is by plan, not accident. The destabilisation of foreign exchange and interest rates through the abolition of the gold standard was not done in the interest of society. On the contrary, it was done to benefit a small minority of people to enable them to milk the vast majority dry of its substance.

You are in effect espousing failed Keynesian economic theory and playing into the hands of the parasites. Beggar they neighbour. The race to the bottom. If we debase the currency somehow this will magically fix the BOP and we will get rich. It’s never worked. As Milton the Midget said: No free lunch.

What you are missing is currency debasement and hyperinflation are not principally a monetary phenomenon (Milton was Wrong). It is an interest rate phenomenon. When the fragile confidence in the Rand snaps, the bough will break and the cradle will fall. And fall it will.

People buy bonds because they wish to exchange capital for income and preserve the value of their capital. These are typically aged folk. Bond rates are rising and the SARB is lowering interest rates. Let us translate this into plain language : ” the value of your bond capital is toast. You have now become impoverished with the full blessing of comme ci comme ca.

Oh really – No law that compels you to report fraudulent transactions – some more fake news!

I reported this to exchange controls and I will revert soonest!

You guys are getting personal. Stop it please. Let’s keep the dignity of the forum…

cccc. how ya doin’? I just wanted to let you know that I am not a lawyer. (Not that I want to boast). The origin of South African law is complex and includes all kinds of interesting stuff such like constitutional law, common law, customary law, statutes and legal precedents. In the absence of any kind of fiduciary responsibility (e.g. manager, director, auditor) can you please point me in the direction of a statute or precedent (for example) that states that one witnessing a crime is under any sort of legal obligation to report the said crime, for example fraudulent transactions such as money laundering? I don’t think you can because it does not exist. You clearly don’t understand the basics of the law.

Who must report:

According to section 34(1) of the Act, any person who holds a position of authority (defined in section 34(4) of the Act), who knows or ought reasonably to have known or suspected that any other person has committed an offence (of corruption) in terms of sections 3 to 16 or 20 to 21 of the Act or theft, fraud, extortion, forgery or uttering of a forged document involving an amount of R100 000,00 or more, must report such knowledge or suspicion or cause such knowledge or suspicion to be reported to any police official.

Exactly as I said.

Or. Not and.

Cute attempt to rationalise wrong doing though. Bet you moan a lot about criminals and tax dodgers around the braai.

End of comments.



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