South African Finance Minister Pravin Gordhan said he's concerned by the risk of capital outflows as investors snap up local-currency bonds in search (more)
South African Finance Minister Pravin Gordhan said he's concerned by the risk of capital outflows as investors snap up local-currency bonds in search of yield.
Managing unpredictable movements of cash is an issue all major emerging markets, including Brazil, face, Gordhan said in an interview in London today. The world needs a coordinated effort to smooth out volatility, he said, adding that South Africa doesn't have many domestic instruments to manage the rand's fluctuations.
"Clearly a risk that all of us see is a sudden change in sentiment," Gordhan said. "Once there have been good inflows there might be unanticipated outflows and the message that we send to the global community and in particular to those that have excess liquidity is be aware of the spillover effects."
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