The SACP has called for individuals directly involved in manipulating the country’s currency’s pair or exchange rate with other currencies to be held personally liable.
Almost 30 commercial banks are under fire for alleged price fixing involving the South African local currency.
British multinational bank Standard Chartered was recently fined almost R42 million by the Competition Commission after it admitted to engaging in currency manipulation between 2007 and 2013.
Citibank paid an administrative penalty of R69.5m in March 2017, while Barclays plc, Barclays Capital and Absa were co-operating with the commission in exchange for leniency.
Many other banks have denied colluding to inflate their profits.
The SACP held its Central Committee at the weekend, saying individuals must be charged with corruption.
“While fining the banks and other financial traders is important, the fines are low, mostly 10% of their annual turnover, and must be increased.
“Moreover, alone the fines are not enough to deter the manipulation of our currency given the astronomical profits that the implicated banks and financial traders control. The SACP therefore calls for new legislative measures to clamp down on the manipulation of our currency,” the party said.
Pressure continues to mount for the South African Reserve Bank (SARB) and national Treasury to communicate a clear message on the damage caused and repercussions for banks that were involved in the dollar-rand exchange manipulation scandal.
The SACP called on the Reserve Bank to consider amending foreign exchange trading licences for guilty parties “to allow the entities only provision of basic foreign exchange facilities to clients but prohibiting them for a defined period from trading for their own account”.
“Further, South Africa should consider returning to the abandoned macroeconomic research group’s proposal for a crawling peg.
“This would mean adopting a band of rates within which the rand exchange rate can be allowed to fluctuate, co-ordinated by currency purchasing or selling to keep it within range. Crawling pegs can help control currency moves, usually during threats of depreciation.”
The SACP warned that it was possible that there was further rand manipulation outside the six years (between 2007 and 2013).
“This must be investigated as well.”