South African central bank governor Tito Mboweni reiterated on Saturday concerns about the toll the strong rand was taking on some sectors of the economy. "All of us have to be concerned if we begin to see slackening in the manufacturing sector," Mboweni told a meeting of Rotary International. He pointed to the impact the strong currency was having on South Africa's clothing industry, which is reeling in the face of burgeoning exports from China after global trade restrictions were eased this year. In a biannual monetary policy review released on Thursday, the central bank strongly defended its surprise decision in April to cut its key repo rate by half a percentage point to 7.0 percent.
The bank said the rate cut was justified by an improved inflation outlook and slackening activity in some sectors that had been hit by the strong rand. The rand has sagged 11 percent against the dollar so far this year but that has done little dent three straight years of huge gains.
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