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South Africa and the Rand Jukka Valimaa & Phil Walker

South Africa and the Rand Jukka Valimaa & Phil Walker. Why is the rising rand a problem?. ANC support 60% Tripartite Alliance COSATU SACP COSATU Secretary General

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South Africa and the Rand Jukka Valimaa & Phil Walker

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  1. South Africa and the RandJukkaValimaa & Phil Walker

  2. Why is the rising rand a problem? • ANC support 60% • Tripartite Alliance • COSATU • SACP • COSATU Secretary General • "We will support the ANC to win the local-government elections next year, but we can't support people we definitely know are…unfit to be leaders. … If we can't get our way, why must we legitimise their campaign and give them a blank cheque?"

  3. What could be done about it? • 1. Lower interest rates • 2. Quantitative Easing

  4. Interest Rate (Nov 2010: Record low, 5.5%)

  5. Inflation (very low, 3.4%)

  6. Exchange Rate (very strong, 1 USD = 6.89 ZAR)

  7. Next step: Change capital account balance • By Tobin tax? No. •  Eliminate apartheid-era restrictions on capital outflows

  8. Questions?

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