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Published: Fri, February 17, 2017
Business | By Megan Pierce

Major banks guilty of currency manipulation in South Africa

Major banks guilty of currency manipulation in South Africa

The country's competitions watchdog is calling for punishing fines on banking giants including HSBC and Barclays.

Fin 24, which reported the commission was alleging the banks had broken the Competition Act, named the banks.

A two-year investigation has found that there was "widespread collusion" and has recommended that all banks involved be fined 10% of their turnover in the country.

Cape Town - The Competition Commission on Wednesday referred a collusion case to the tribunal for prosecution against 17 banks, including three of South Africa's big banks.

The commission said traders of the respondents primarily used trading platforms such as the Reuters currency trading platform to carry out their collusive activities. Major worldwide banks have had to pay billions of dollars in fines since a global scandal in 2013 over rigging foreign exchange markets. He said the financial sector needs new players to diversify, and the government is committed to establishing a state bank.

The investigation, which was initiated in April 2015, related mainly to worldwide financial institutions that had allegedly been directly or indirectly, and in collusion with each other, involved in unlawfully distorting competition in the foreign exchange market for the USD/ZAR pair in offshore financial centres.

A member of the African National Congress Youth League protests in front of ABSA Bank against what they argue is the bank benefiting from an apartheid-era bailout, in Durban, South Africa, January 26.

The Democratic Alliance (DA) claims Gupta linked ANC ministers are waging a war with banks and are willing to use the competition authorities to push a populist agenda of radical economic transformation. Last week Zuma also blamed South Africa's top four banks for controlling the economy.

The South African rand lost nearly half its value against the USA dollar over the past five years as the country struggled through an economic crisis.

"The investigation related mainly to worldwide financial institutions that had allegedly been directly or indirectly‚ and in collusion with each other‚ involved in unlawfully distorting competition in the foreign exchange market for the USD/ZAR pair in offshore financial centres".

"We believe collusion around South Africa's currency is treacherous and should be treated as such".

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