Listen: SA can withstand any financial shocks from Brexit, says Gordhan
In light of Britain's exit from the European Union, ongoing efforts by South Africa to reignite growth have become that much more urgent and critical, Finance Minister Pravin Gordhan said on Friday.
"We have been saying for sometime now that the process leading up to the voting in Britain would result in volatility in the financial markets and in sentiment and confidence and this is clearly the case in the events that have unfolded today," Gordhan said.
The rand tumbled as much as 8% to the dollar early on Friday morning and the JSE all share opened sharply lower after British voters voted to exit the EU.
The minister reassured the public that the country’s banking and financial institutions were well positioned to withstand financial shocks‚ and expressed confidence that SA’s banks and regulatory frameworks were “extremely resilient and reliable.”
The National Treasury and the Reserve Bank were “keenly monitoring” developments in the UK and their implications for SA‚ Gordhan said. Monitoring would continue over the next few says‚ he added.
Gordhan urged business‚ labour and government to continue cooperating to support investor confidence.
“The National Treasury and the Reserve Bank have met early this morning and are keenly monitoring developments that have taken place and the implications for South Africa and will keep the South African public informed," Gordhan said.
Trade links between SA‚ the EU and Britain were “fairly strong” and based on solid agreements‚ Gordhan said‚ adding that: “we have a two-year period during which whatever changes need to be made to agreements and treaties can in fact be made.”
“In this context‚ our ongoing efforts as South Africans‚ government‚ business‚ labour and civil society to reignite growth become that much more urgent and critical.”