South African Finance Minister Pravin Gordhan said he was concerned about the rapid movement of capital inflows and said such large flows were having an impact on South Africa and other countries.
“In addition to concerns about the global recovery … there’s an additional factor… The rapid movement of huge capital flows around the world, which has an impact particularly on the currencies of developing countries like South Africa,” Gordhan said at a news conference, ahead of his departure for a G20 summit in South Korea.
Gordhan said measures to handle capital inflows had to be found locally, Reuters reports.
“We need to find tools in the domestic environment that ideally do not have a negative impact on other countries,” he said.
Gordhan said all available funds would be used to help South Africa’s Reserve Bank rebuild its reserves.
Emerging market currencies, including South Africa’s rand, have soared in value as investors faced with minimal interest rates in crisis-hit developed economies seek higher returns elsewhere.
In its medium term budget statement last month, the Treasury said Africa’s biggest economy had few options to devalue the rand in the face of increased capital inflows.
The rand has gained 28 percent since the start of 2009 and was trading 0.57 percent lower at 6.8640 to the dollar by 0733