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South Africa calls for policy harmony

South Africa said it wants agreement within the Group of 20 nations on the coordination of economic policies as it pushes for stronger acknowledgment of the impact of the Federal Reserve’s tapering on smaller nations.

The rand fell 19 per cent in the past year, threatening to push inflation through the central bank’s upper band and forcing policy makers to unexpectedly increase interest rates last month. The pass-through from a weaker currency to inflation has been more immediate while the benefits to exports “take a bit longer to respond,” South Africa’s deputy finance minister Nhlanhla Nene said in interview in Sydney.

“What we would want is something that agrees to the coordination of economic policies in addressing our challenges, so those imbalances do not impact negatively on the other economies,” Nene said.

“Coordination takes recognition of the stage at which the other economies are in relation to your own. If we were just alive to that, we would be better placed to be able to come up with mutually-beneficial policies and initiatives that would actually benefit all countries,” he added.