Page 166 - SARB: 100-Year Journey

President Mbeki appointed the Commission of Inquiry into the Rand. /Louise Gubb/Corbis via Getty Images
Christine Qunta, one of the commissioners at the Rand Inquiry. /Media24/Gallo Images
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The Commission of Inquiry into the Rapid Depreciation of the Exchange Rate of the Rand
Then, there was the rand crisis of 2001−02.
The local currency lost considerable value between January and December 2001. Historical estimates and data from that time place the substantial decline at 10.7% between 1 January and 31 August 2001, and at 42% in the period covering 1 September to 31 December 2001.
Damaging allegations of currency manipulation soon followed. This set in motion the establishment of a Commission of Inquiry into the Rapid Depreciation of the Exchange Rate of the Rand by President Thabo Mbeki.
President Mbeki appointed the inquiry to “find out whether there had been any misdoing,” Guma said. “I think Kevin Wakeford, literally, signalled that there might be something going wrong there.”
Judge John Myburgh, who had helped Mboweni set up the labour courts in the 1990s, chaired the inquiry, while Dr Mandla Gantsho and Christine Qunta served as co-commissioners. In later years, Gantsho served as a non-executive director on the SARB’s Board.
When a country is a small, open economy like South Africa “there are times when people will look at the value of the rand and [ask] how one determines the value of the rand. Is it external issues against the dollar or is it the internal issues determining the rand? When you’re a small country, as we are, it’s going to be a combination of the two,” Guma said.
That, in essence, was the subtext to the inquiry – determining the underlying causes of the rand volatility. The wild swings in the local currency caused panic and puzzled many, and prompted the official search for answers.
Although President Mbeki never interfered, nor attempted to interfere, in the affairs of the central bank, there were times when his administration sought clarity on matters from the SARB.
“I can remember at the time of the rand crisis, we did have to meet with President Mbeki and National Treasury for us to explain why it was that this exchange rate had become so malfeasant. But that was purely for clarification to the President. It wasn’t the President saying, do something or this is what you have to do,” Guma said.
Cross, who was a witness at the inquiry, said: “The country wanted to know why the rand ran away like that. The answers are clear today.