Oh, South Africa! There is never a dull day here. 🤭
28 mainly international banks have long been accused of rand manipulation. Cue the spy music!
The case, first brought by the Competition Commission six years ago, argues there was a conspiracy to manipulate the US dollar-South African rand exchange rate from 2007 to 2013. The culprits included giants like the UK’s Barclays, JP Morgan Chase & Co and Investec.
How? It’s all rather technical, but according to the commission, the banks worked together to manipulate the USD/ZAR currency pair by fixing various types of currency bids, dodgy work with traders, and manipulating liquidity.
Now, one of the accused banks, Standard Chartered, based in London – entered into an agreement with the commission that includes paying R42.7 million to settle the case – according to a statement released by the commission last month. They’ve also committed to telling on their co-conspirators!
But the story didn’t end there. Once revealed, the government entered the fray in its usual heavy-handed manner. Minister in the Presidency, Khumbudzo Ntshavheni, claimed in November that the private sector had no interest in developing the country and wanted to collapse the government. From where we’re sitting, it looks like our government doesn’t need any help collapsing in on itself. 😒
It’s important to note, though, that the National Treasury said that the actions of the banks were not the leading cause of the local currency losing its value over the past decade or the lousy economy.
The fact is, this is a messy topic that politicians have hijacked and are using as a talking point in the lead-up to the elections. Over on the right-wing cesspit that is X (Formerly known as Twitter), bots and misinformation agents are parroting how the currency rigging is “treason”. There have been plainly false claims that currency manipulation “costs South Africa R1-trillion a day”.
While this issue is ongoing, we shouldn’t allow misinformation to lead the charge when discussing currency rigging. We should applaud the commission for bringing this to light and hope that banks continue to be held accountable.
This brief is part of our Year That Was 2023 edition. Read the full edition here.
