The South African Communist Party (SACP) Central Committee Political Bureau, in a meeting held on Friday, November 24, 2023, has called on the government to take more robust measures against currency exchange rate manipulation. The SACP, the highest decision-making body between Central Committee plenaries, emphasizes the need to treat such conduct as corruption, a criminal offense, an act of economic sabotage, and a regime change endeavor.
This call follows the 2015 investigation by the Competition Commission into 28 banks, including both local and foreign-controlled multinational banks, for manipulating the Rand from 2007 to 2013. The Commission recommended fines equivalent to 10% of the banks’ annual turnover, a penalty criticized by the SACP as insufficient given the scale of the damage caused.
Recent developments, including the Competition Appeal Court ruling and the Competition Commission’s new charge sheet in 2020, have expanded the scope of implicated banks to include Nedbank Group, Rand Merchant Bank, and Standard Americas Inc. Standard Chartered Bank, a British-controlled multinational, has admitted liability for manipulating the Dollar-Rand pair and agreed to pay an administrative penalty of approximately R43 million. Similarly, in 2017, Citibank, an American-controlled multinational, paid a fine of R70 million.
The SACP argues that fines alone are inadequate in addressing the extensive damage caused by currency manipulation. The party is calling for the prosecution of manipulators and urges the implementation of regulatory and monetary policy measures, including exchange rate controls, to prevent corruption, crime, and economic sabotage.
Dr. Alex Mohubetswane Mashilo, a Central Committee Member, National Spokesperson, and Political Bureau Secretary for Policy and Research, highlighted the long-lasting impacts of currency manipulation. These impacts range from economic and financial losses to national revenue declines due to currency devaluation.
The SACP emphasizes the importance of tight regulation of South Africa’s capital account and the implementation of stronger legislative measures to counter illicit capital flows. Furthermore, the party highlights the role of currency manipulation in contributing to inflation, rising prices, and economic instability, ultimately affecting the purchasing power of consumers and exacerbating unemployment and poverty.
The SACP calls for a holistic approach, including measures to safeguard against the risks of currency exchange rate devaluation, such as reducing the National Treasury’s appetite for foreign currency-denominated debt accumulation. The party argues that successful currency attacks can lead to a loss of confidence in the country’s currency and financial stability, resulting in capital flight and compounding economic challenges, including job losses and retrenchments.
The SACP, founded in 1921 as the Communist Party of South Africa, remains committed to advocating for policies that protect the country’s economic sovereignty and development.
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