South Africa’s rand has room to strengthen further if the Pretoria government presses for reforms and prudence, South African Reserve Bank Governor Lesetja Kganyago said.
The currency of Africa’s largest economy has been the best performing among emerging markets, up 2.5 per cent against the dollar since the start of the year, while most rands reported losses against cash.
“There should be positive momentum and that positive momentum is not going to be something just driven by the markets,” Kganyago, the governor of the South African Reserve Bank, said in an interview on Thursday on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington.
The question is whether the government will continue to act with determination and patience in terms of policies and reform processes.
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The South African Reserve Bank has announced a series of reforms in energy, transport, water and communications, pledging to cut spending, increase revenues and take further steps to reduce average credit.
The rand has risen sharply since the African National Congress was forced to form a coalition with other parties after failing to win a share of parliament in elections in May, an election that marked the end of free politics for the first time since 1994.
“If you restore investor or consumer confidence, it’s like a free stimulus for you,” he said.
