Nov. 10 (Bloomberg) -- South Africa’s Economic Development Minister Ebrahim Patel denied a press report that he wanted to fix the exchange rate and said he was unaware of any such debate within government.

“It’s certainly not an option that has been raised in my presence, in a document or in a discussion that I’ve been involved in,” Patel told reporters in Cape Town today.

The rand has gained 27 percent against the dollar this year, undermining the competitiveness of the country’s exports and boosting imports. Labor unions have called on the government to weaken the currency to protect jobs.

On Oct. 22, Sake24 said Patel, a former head of the main clothing workers’ union, may propose “freezing” the rand at a pre-determined level. The Johannesburg-based newspaper did not say where it got its information.

“What was unfortunate about that article is that it’s so without foundation,” Patel said. “This was pure invention. It doesn’t do the cause of economic debate any good service if we create such paranoia about policy.”

Patel’s ministry plans to host public discussions within the next two weeks with a view to canvassing opinions from economists, business representatives and labor unionists on how the exchange rate should be managed.

“There is a huge price to be paid for an exchange rate that prices South Africa out of international markets,” Patel said. “We need a competitive exchange rate. We would like to have an open discussion” on how to achieve this.

Finance Minister Pravin Gordhan and Tito Mboweni, who stepped down as the governor of the central bank on Nov. 6, have also voiced concern over recent weeks about the strength of the rand.

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net

Last Updated: November 10, 2009 05:25 EST