ON THE MONEY
STUART THEOBALD: Competition Commission needs to investigate entire foreign exchange services sector
Foreign exchange competitiveness is not about the level of the exchange rate, it is about the cost of buying and selling forex, and these companies are coining it, writes Stuart Theobald
The Competition Commission should not stop at the prosecution of bank traders who manipulated the rand exchange rate. It should undertake a full investigation into the competitiveness of foreign exchange services as a whole in SA. The bank traders manipulated a small part of the market that only affected very large companies. But in SA, it is the poorest sections of society that face the biggest rip-offs in foreign exchange transactions. A World Bank study late in 2016 found that SA is the most expensive among the Group of 20 (G-20) states for sending remittances abroad. It costs an average of 17.9% to send $200 from SA to another G-20 country. That is more than double the average cost for the G-20 and eight times the lowest-cost country, Russia, at 2.1%. SA ranks second on the cost of remitting money into the country with costs of 8.1%, following China (10.3%).For instance, at the weekend, Rennies was offering US dollar notes for R13.3445 and buying them for R12.4706. That means th...
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