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Almost 30 commercial banks are under fire for alleged price fixing involving the South African Rand.

British multinational bank, Standard Chartered, was recently fined almost R42 million by The Competition Commission after it admitted to engaging in a currency manipulation scheme, fiddling with the rand-US dollar exchange rate between 2007 and 2013 for their own profits. It’s the second firm to be outed in the banking scandal, while scores of other banks have denied colluding to inflate their profits.

It was alleged that traders at the 30 banks communicated on instant messaging platforms to fix bids instead of following normal trading patterns on the market, also offering and engaging in other activities that fell foul of competition rules, the commission said.

If these dodgy dealings run over your head like water, it is time to turn to 5FM radio presenter and YouTuber Dan Corder, for a thorough run-through and easy-to-understand explanation:

When news of this scandal first broke, the government, largely ANC politicians, ran with the news and alleged that this is the reason the SA economy is floundering. The recent admission of guilt from SCB seemed to have provided the perfect opportunity for politicking and misinformation from officials.

However, the National Treasury has just refuted the allegations that rand manipulation is the cause of South Africa’s economic woes and the general depreciation of the local currency over the years, per BuisnessTech.

Minister in the Presidency Khumbudzo Ntshavheni has used the case to make unfounded claims that the private sector has been engineering the collapse of government and South Africa’s economy. Other politicians also jumped on the bandwagon, claiming that private banks were destroying the value of the rand while making trillions of rands in profit due to the manipulation.

As Dan shows, trillions just ain’t possible.

These allegations were made despite the private sector working closely with the government to try and undo the damage done to key sectors due to self-induced service delivery failures, mismanagement, maladministration and sheer neglect by the state.

The National Treasury set the record straight, saying that only individual clients were harmed by the bank scandal activity:

More importantly, however, “whilst the wrongdoing described by the Competition Tribunal harmed individual clients, it would not have influenced the depreciating trend of the currency since 2013, the level of which is driven by broader changes in the global and domestic economy.”

The rand has depreciated against the dollar by 85% over the last decade, crippled by several key moments, including former president Jacob Zuma’s state capture and corruption, market shifts from the COVID-19 pandemic, the ongoing electricity crisis and poor geopolitical positions from the government around the Russia-Ukraine war.

Ja, ANC, you can’t cry ‘foreign banks’ and walk away from the mess you made that easily.

[source:businesstech]