JOHANNESBURG - A sharp fall in the rand against the dollar to a four-year low on Tuesday was a ‘bit of an over-reaction,’ Finance Minister Pravin Gordhan said.
The rand fell to 9.61/dollar on worries about mining labour tension.
"Clearly there is pressure on the currency at the moment. I think the response of the markets is a bit of an over-reaction but there is no doubt that sentiment is driving some of these issues," Gordhan told parliament.
However, Sapa quotes Gordhan as warning South Africa is at a ‘cross-roads’ over renewed labour unrest in the mining sector.
Introducing debate on his budget vote in the National Assembly, Gordhan said labour, government, and business had to take concerted action or the country would lose jobs and investor confidence, and companies would close.
"The present uncertainty in the labour relations environment in mining and other sectors requires concerted action by organised labour, business, civic leaders, and government. There is no role for complacency here," he said.
"We are all in this together. If we do not resolve our labour relations challenges, we will be losers. We will see deteriorating confidence, job losses, and business failures."
On the other hand, Gordhan said, finding sensible solutions to the labour strife would benefit all.
"But if we find a balanced, fair, socially responsible solution, we all stand to gain and we will see higher investment, higher employment, and improvements in living conditions.
"This is the choice that lies before us."
Source: MoneyWeb
