It's never boring in South Africa!
The news regarding rand manipulation in South Africa in 2023 involves several key developments:
- Investigation by the Competition Commission: The South African Reserve Bank has emphasized its non-involvement in the Competition Commission's investigation into alleged rand manipulation. This probe is massive since it involves about 30 commercial banks accused of price fixing in relation to the South African Rand.
- Allegations Against Banks: The naughty banks are accused of manipulating the US dollar and South African Rand pair, which violates section 41b of the Competition Act. This manipulation reportedly includes dividing markets and allocating customers among the banks involved.
- Economic Impact: The alleged manipulation had a substantial impact on various aspects of the South African economy. This includes imports, exports, foreign direct investment, public and private debt, and the pricing of goods and services. This indicates a widespread economic consequence resulting from the manipulation. That cost of living crisis is real!
- Admission of Guilt and Fines: Some banks have already admitted to their involvement in the manipulation. For instance, one of the banks was fined R42 million by the Competition Commission after admitting to currency manipulation. Of course, there's still noise about how pitifully low the fines are when compared to the scale of the profits made through all of the manipulation by the banks, which is estimated at around a trillion rand a day between 2007 and 2013.
- Calls for Accountability: The Reserve Bank, which is tasked with protecting the rand's value, is now under scrutiny, with political parties demanding accountability and sanctions against the banks found to be transgressors. Moreover, the South African Federation of Trade Unions has called for more banks to be fined for their actions, indicating a demand for broader accountability. Let's hope that actually sticks. The white-collar criminals have deep pockets.
- Legal Proceedings and Further Investigation: The Competition Commission has granted leniency (why exactly?) to three banks and settled with two of them. They emphasize that the remaining banks need to answer for their actions in court. Need several lifetime supplies of cooldrinks for bribery over here. The total penalties for the two settled banks exceed a hundred million. The ongoing legal proceedings and investigations are focused on determining the extent of coordinated conduct by these banks during the period from 2007 to September 2013.
So, there are too many damn actors in this situation. The banks went greedy. The large-scale economic implications have left South Africans reeling as if there aren't enough problems. Let the legal proceedings continue and the calls for stringent action and greater transparency in the financial sector. Crypto guys would be promoting louder if it wasn't for the scandals that have happened this year with central exchanges. So many questions need to be asked and the answers should be better than the usual wrist slaps that get handed out.