Lerato Mbhiza
The South African Reserve Bank says it won’t meddle in the Competition Commission’s probe into claims of rand manipulation by almost 30 commercial banks who are under fire for price fixing involving the South African currency.
Speaking at the announcement of the policy rates, which remained unchanged on Thursday, SARB governor Lesetja Kganyago told the media that the Competition Commission has jurisdiction over the matter and not the Reserve Bank.
“Should they require any further assistance from us, they will get it. But they are the competent authority to investigate any allegations of market abuse or market manipulation.
“They must be given the space to do their work and follow their processes and we should not burden them with asking for running commentary. Beyond that, you are not going to get any further comment from the Reserve Bank,” he said.
Last week, the competition commission fined British multinational bank Standard Chartered, the second banking firm to agree to a settlement, R42 million after it admitted to engaging in currency manipulation.
This is not the first time that allegations of the rand manipulation by major banks has come to the surface. In 2019 the EFF had asked the National Treasury if they had investigated the impact of the rand manipulation by various banks when Tito Mboweni was the government.
At the time Mboweni answered with a no, adding that neither Treasury nor the SARB had any evidence that any bank had taken part in currency manipulation and he told Members of Parliament to wait for the outcome of the Competition Commission’s investigation.
Four years earlier in 2015, the Commission opened its first probe into allegations of rand manipulation and collusion by a large concert of local and multinational financial institutions.
These included Standard Bank, Absa, Investec, Citibank, First Rand Bank, Barclays, Merrill Lynch, HSBC and Standard Chartered. Evidence points to a network of well-coordinated corrupt activity as banks colluded on prices in the trading of the rand in a six-year period, from 2007 to 2013.
The Competition Commission estimates that close to R1 trillion was transacted daily between 2007 and 2013 in this illicit currency trading.
Eight years after the investigation began public sentiment is that the penalties imposed on the banks do not match the amount of money and damage to the South African economy that their actions have caused.
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