The South African currency the rand, subjected to a severe battering last year, made impressive gains against major currencies, trading at 10.25 to the US dollar in early May. It hit an all time low of 13.85 to the dollar in late December 2001. Now the bet is on the rand.
Losing 37% of its value in strange circumstances last year, it was only arrested when Kevin Wakeford, the head of the South African Chamber Of Commerce, blew the whistle on dubious dealings that had connived to drive the value of the rand down. A commission of enquiry (called the Myburgh Commission) was subsequently set up to probe the rand's decline.
Since then the rand has enjoyed unprecedented stability. And the curious thing has been that anytime the rand commission sat after a recess, the rand gained strength.
As usual, there has been no shortage of flimsy explanations from the so-called experts, especially after the Zimbabwe election.
On 30 April, the Myburgh Commission presented its interim report to President Thabo Mbeki. It is yet to be unveiled, but the final report is expected next month. Since 28 January when it first sat, the Commission has heard testimony from economists, the banking sector, accountants, the Reserve Bank and currency traders.
A myriad of confusing reasons have been advanced, including the 11 September attacks on America, emerging market contagion from currency problems in Turkey and Argentina, delays in privatisation by the government, dividend out- flows, slowdown of the global economy, and foreign investors hedging of rand-denominated assets.
Jim O'Neil, head of economic research at Goldmans Sachs, fingered South Africa's broad balance of payments deficits over the past few years. Others have nailed "Big Brother", the South African Reserve Bank's circular in October 2001, saying it would clamp down on violations of foreign exchange controls.
At the end of the day, it has turned out to be an invaluable lesson on how the currency market operates. But the amorphous nature of the industry is such that "the more it is explained, the less one understands".
Most testimonies from the private sector have, apart from shedding little light on the decline, taken the opportunity to call for the abolition of exchange controls, as a measure to ensure the stability of the rand. Government regulations restrict the amount of foreign currency that can be taken out of the country by companies and individuals but as with all things, loopholes and...