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To: Richnorth who wrote (80780)	1/15/2002 4:34:55 PM
From: long-gone	Read Replies (2) \| Respond to of 116814

Tuesday January 15, 3:23 pm Eastern Time S.Africa's Mboweni says rand inquiry good idea JOHANNESBURG, Jan 15 (Reuters) - The head of South Africa's central bank said on Tuesday that allegations that collusion between officials and private individuals had contributed to the slide of the rand last year had convinced him of the benefit of an inquiry. ADVERTISEMENT The comments from central bank Governor Tito Mboweni marked the first time that any official had mentioned such allegations were behind President Thabo Mbeki's decision to launch an inquiry into the rand's slide of 37 percent against the dollar last year. ``Initially, I was doubtful about the benefits which may accrue from such an investigation,'' Mboweni told South African radio in a wide-ranging interview. ``But when Kevin Wakeford from SACOB said part of the problem was there may have been collusion between these private sector financial manipulators and with public officials -- and in that instance he was pointing a finger at the Reserve Bank and the Treasury -- at that point my view was, let's proceed with the commission.'' Wakeford, head of the South African Chamber of Business (SACOB), alleged there had been market manipulation of the exchange rate through ``collusion'' that allowed certain individuals and institutions to enrich themselves. He had not publicly mentioned any official involvement, but his submission of evidence to authorities would have carried more details than the statement he released to the media. ``Had he not made that particular allegation, my view would have been that if Kevin Wakeford had any evidence he should bring that ... to the Reserve Bank and the Treasury and they should investigate his allegations...,'' Mboweni said. ``On that basis I supported the investigation.'' The government announced wide-ranging terms of reference for the commission of inquiry on Tuesday, saying it would present an initial report to Mbeki by April 30. Mboweni said he believed that the rand would eventually stabilise because of South Africa's sound economic policies, and that market speculators were not too blame for its volatility. ``I am not solely blaming speculators for the dramatic decline in the currency...but to the extent that South African institutions played a role in shorting the rand, then the ... commission must make recommendations and let us debate them,'' he said. Mboweni said the central bank's unexpected decision to raise its key repo rate by 100 basis points to 10.50 percent on Tuesday was aimed at achieving South Africa's three percent to six percent inflation target in 2003 and 2004, not this year. ``For all intents and purposes for 2002 we are still on course, all things remaining the same -- we are now looking at inflation for 2003,'' he said. ``From our work we see signs that growth will pick up somewhat as the year goes by as a consequence of the depreciation of the exchange rate...but on the other hand there are factors indicating inflation may go up,'' he said. Mboweni said it was very important for South Africa to stick to its economic policies. ``We must stay the course. To change our macroeconomic policies at this point would be a grave error...,'' he said. He also appealed to wealthy South Africans to stop taking money out of the country. ``They should in fact be investing here...we should appeal to the patriotic sentiment of those South Africans who have large amounts of money they are better off using this money at home.'' biz.yahoo.com