Money SA economy
The rand lost ground this morning amid press reports suggesting that the African National Congress is mulling a tax on volatile capital inflows to achieve a more competitive level for the rand.
At 09.05am local time the rand was bid at R7.30 to the dollar, R9.63 to the euro and R11.62 to the pound. The euro was bid at $1.3170 from $1.3173 overnight.
A trader said: "We did bounce around 7.25 overnight and then lost further ground this morning on suggestions of inflow taxes. That has contributed to a weaker rand, and to be honest we have needed a story like this to peg back the local currency. We do need the rand through 7.35 against the dollar, to see any further easing though," he said. "The rand has lost a lot of ground against the euro this morning."
Business day reported that in a discussion document for its national general council at the end of next month, the ANC said that high foreign capital inflows came at a heavy price, including the increased value of the rand.
This "limited" the overall competitiveness of the economy, making exports more expensive and imports cheaper, it said.
The ANC put "finding ways to ensure a more competitive currency" second on a list of short-term core priorities to support sustainable economic growth.
