South Africa’s Flexible Rand Acts as ‘Buffer,’ Gordhan Says

South Africa’s flexible exchange rate provides a “buffer against shocks” and helps to reduce “volatility” in interest rates, Finance Minister Pravin Gordhan said.

The central bank’s 3 percent to 6 percent inflation target gives investors “confidence in times of crisis,” Gordhan said in a written reply to a question from a lawmaker in Cape Town. South African banks are “strongly capitalized” and have weathered the global financial crisis better than many in developed countries, Gordhan added.