Speaker, the ACDP expresses its grave concern about the rapidly depreciating rand, which slid 11% last month to reach a four- year-low of R10,20 to the dollar last week. While it is very clear that the rand was oversold last week and has recovered to R9,70 at lunchtime today, it is clear that the rand remains highly vulnerable to change in investor sentiment.
Hon members, order! Let the speaker be heard.
On 24 May, the Monetary Policy Committee expressed its increasing concern about the deteriorating outlook of the South African economy. These include a number of critical issues that need to be addressed urgently, such as the financing of the deficit on the current account, the fractious labour relations environment and the associated risks of protracted work stoppages and excessive wage increases, electricity supply constraints, upside risk to inflation and the risk to growth and employment creation.
As the ACDP, we appreciate that part of the rand's weakness can be ascribed to the USA Federal Reserve Bank's reduction of monetary stimulus and that this would have fuelled demand. This did not happen and resulted in an increase in the rand's strength yesterday. This shows the impact of the US on our economy, as expressed by hon Koornhof.
We also agree with the Reserve Bank's call that:
There is an urgent imperative for all parties - government, business, labour and civil society - to interact and address these issues and vulnerabilities at a national level.
We should not have waited so long to address these critical issues, however. We are in it together;, we will sink or swim together. Let us choose to swim together and resolve these issues.