Any policy measures that led to a weakening of the rand would scare off foreign investors

DEVALUING the rand would be a “very short-sighted” move for South Africa to make, International Monetary Fund (IMF) managing director Dominique Strauss-Kahn said yesterday. Local union federation Cosatu, an ally of the ANC, has called on the central bank to widen its inflation targeting mandate and wants a much weaker rand to help boost local industries and create jobs.

Strauss-Kahn said any policy measures that led to a weakening of the rand would scare off the foreign investors and capital that are needed to fund the country’s current account deficit. The rand gained about 30% against the dollar in 2009 and is considered relatively strong at its current levels of around 7,40/$.

Late last year the government expressed concern about the currency’s strength and in February Finance Minister Pravin Gordhan said he would like to see less volatility in the rand.

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