Move to devalue the rand will hit South Africa’s poor the hardest

By bne IntelliNews August 1, 2010
A move to devalue therand will hit South Africas poor the hardest by driving up inflation, Pick nPay chairman Gareth Ackerman warned. As a net food importer South Africas foodproducts are dollar-denominated, including staples like bread, rice tea andcoffee. Devaluing the rand would thus put the poorest sector of the populationunder even more financial pressure. Ackerman, chairman of the countryssecond-largest supermarket chain, spoke after official figures showed a Q2 lossof 53,000 manufacturing jobs, supposedly giving trade unions and manufacturerscause to call for a weaker rand to boost exports. A weaker rand would also pushup electricity tariffs, Elna Moolman, SA economist at Renaissance BJM said. Thetrade account swung back into surplus, June, partly boosted by a backlog ofexports from the previous months transport strike the South African RevenueService (SARS) said. The June trade balance rose to ZAR 5.6bn after a Mayshortfall of ZAR 302mn. SARS put the cumulative deficit for the year so far atZAR 7.8bn against a ZAR 17.8bn shortfall y/y.

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