Standard Chartered admits it manipulated the rand, agrees to R42 million fine
The Competition Commission charged 28 banks for their involvement in manipulating the rand/dollar currency pair from 2003 to 2013.
![Standard Chartered Bank](https://media.citizen.co.za/wp-content/uploads/2023/11/standard-chartered-bank-scaled.jpg)
Image: iStock
Multinational bank, Standard Chartered, has admitted liability for manipulating the rand and agreed to pay a fine of R42.72 million.
The Competition Commission said in a statement this morning that it reached a settlement with UK-based multinational bank, Standard Chartered Bank. According to the settlement agreement, Standard Chartered admits liability for manipulating the USD/ZAR currency pair and agreed to pay an administrative penalty of R42 715 880.
The commission says Standard Chartered participated in the manipulation of the USD/ZAR currency pair by fixing bids, offers, bid-offer spreads, the spot exchange rate and the exchange rate at the FIX.
ALSO READ: Competition Commission says major banks colluded, refers them for prosecution
In addition, the bank participated in dividing markets by allocating customers where traders withhold or pull their existing bids or offers from the market to allow other traders to execute and complete their trade, a contravention of section 4(1)(b) (i) & (ii) of the Competition Act.
The forex manipulation significantly affected the exchange rate of the rand and caused ripple effects across multiple sectors of the South African economy. Imports and exports, foreign direct investment, public and private debt, as well as company balance sheets were affected, in turn affecting prices of goods, services and financial assets.
Standard Chartered one of 28 banks allegedly manipulating rand
The other banks are still appearing before the Competition Appeal Court to seek an order to set aside a Competition Tribunal order of 30 March 2023. It ordered respondent banks to file their answers to the complaint referral.
Standard Chartered is one of the 28 banks the commission is prosecuting for manipulating the USD/ZAR currency pair. This settlement ends litigation that stretched over eight years between the commission and Standard Chartered over the currency manipulation allegations.
Citibank N.A. already settled with the commission for the same conduct in 2017 and paid a penalty of R69.5 million.
“The Commission welcomes Standard Chartered Bank’s decision to reach a settlement on this matter and encourages other respondent banks to consider settling the complaint against them. This settlement affirms the commission’s pursuit of allegations related to the manipulation of the USD/ZAR currency pair, given the ultimate impact of the currency manipulation on the value of the South African rand,” Doris Tshepe, the competition commissioner, said.
The Tribunal not only will determine the financial penalties for the relevant banks but the outcome will also be significant to reinforce regulatory measures to prevent these kinds of manipulative practices that adversely affect national economies.
The scandal highlighted how important stringent measures are to uphold the integrity of financial markets and protect the economic stability of the country.
For more news your way
Download our app and read this and other great stories on the move. Available for Android and iOS.