The Rigging of the Rand

Why South Africa must take its currency cartels seriously

By Mphuthumi Ntabeni

When Standard Chartered signed a settlement with South Africa’s Competition Commission in November 2023, it admitted to something extraordinary, a collusion in the dollar–rand market. Traders had fixed bids and offers, widened spreads, and synchronized prices at key fix moments. In other words, they manipulated the exchange rate at the very heart of South Africa’s economy.

The bank paid R42.7 million and promised to cooperate with prosecutors. That might sound like accountability. But it is barely the beginning of the story.

Since 2015, South Africa’s Competition Commission has pursued a sprawling case against 28 local and international banks, alleging collusion on the USD/ZAR currency pair dating back to 2007. Citibank cut a deal first in 2017. Standard Chartered followed last year. But most banks dug in, and in January 2024 the Competition Appeal Court threw out much of the case on jurisdictional grounds.

This week, the country’s Constitutional Court is hearing the Commission’s appeal, a test of whether South Africa can enforce its laws when misconduct was coordinated offshore but inflicted at home.

The state’s argument is stark. Traders did not just bend rules in private chatrooms. They conspired to distort a public price with consequences for every South African household. And as the Commission’s lead counsel, Advocate Tembeka Ngcukaitobi, has argued, this is a classic example of the evolution of cartels. What begins as a handful of traders quietly “sharing colour” in chatrooms morphs into a structured conspiracy; spreading the practice across desks and banks, formalising methods, and exploiting opacity in a market with weak surveillance. Left unchecked, such behaviour matures into a full-fledged cartel, one that rigs prices not just for the entire economy.

This is not an abstract fight. Every time the rand was deliberately weakened, imports of wheat, fuel, and basic household goods became more expensive. A few cents added to the petrol price or the cost of bread might seem small. But for poor households, which already spend over 40 percent of their income on food and transport, the impact is immediate and punishing. The poorest South Africans subsidised the profit margins of traders colluding in London and Sandton chatrooms.

There is a fiscal sting too. A weaker, more volatile rand drives up the cost of government borrowing, leaving less for social grants, schools, and hospitals. The irony is cruel. Those who never touch a forex terminal, the pensioner in Lusikisiki, the commuter in Soweto, the domestic worker in Cape Town, absorb the cost of this corruption.

The penalties, however, have been laughably light. Under South Africa’s Competition Act, corporate fines are capped at 10 percent of domestic turnover. For global banks, that is pocket change, more like a fee for misconduct than a deterrent. Worse, fines arrive years later and are borne by shareholders, not the traders or executives who actually conspired.

Parliament foresaw this problem when it created Section 73A of the Act, which makes it a crime for directors and managers to cause or knowingly acquiesce in cartel conduct. The law allows for up to 10 years in prison. Yet no individuals have been prosecuted in the rand-rigging case. If this scandal does not meet the threshold for personal accountability, one wonders what ever would.

What should happen now is both clear and doable. South Africa must use the laws it already has against individuals, not just corporations. It must scale fines to the actual harm, not just turnover. It should explore disgorgement and restitution, so ill-gotten gains flow back to the Treasury and pension funds rather than staying on bank balance sheets. It should impose temporary suspensions or licensing conditions on repeat offenders and hard-wire transparency into the rand market with stronger oversight of trading chats and order books.

And it must insist on accountability at the board level, forcing directors of sanctioned banks to explain publicly how their oversight failed and what they will change. Also to be exposed to some more punitive measures beyond mere fines by criminalising this action. 

This week’s Constitutional Court hearings are about more than jurisdiction. They are about whether South Africa has the will to govern the market that sets the price of bread, petrol, and debt. The truth is, Pretoria already has enough from Citibank’s and Standard Chartered’s admissions to act.

As Ngcukaitobi has reminded the courts, cartel conduct is not just a technical breach of market rules. It is an attack on the poor, on the integrity of public finance, and on the state’s capacity to protect its citizens. If manipulating the rand can cost bankers their desks, their licences, or even their liberty, South Africa would no longer have to wait for foreign regulators to police its most strategic market.

The law is there. The question is whether, or when, will we use it.