Peg the rand, urges Cosatu

COSATU has called for an exchange rate of R10 to the US dollar to boost the country's weak manufacturing sector.

Cosatu general secretary Zwelinzima Vavi also warned that despite signs of the recession being over, more jobs will be lost in December due to the state's failing economic policies.

Vavi said yesterday that inflation targeting was also to blame for the high interest and exchange rates.

"We must do everything necessary to deal with this crisis," he said. "Even China fixes its exchange rate and I think we should look at a similar solution.

"We are calling for a bolder government that recognises the fact that we are in a deep crisis, not one that is a prisoner of how the markets perform."

Vavi welcomed the new approach newly appointed Reserve Bank Governor Gill Marcus has adopted. She has undertaken to allow the union to participate in discussions surrounding inflation.

Vavi did not see eye-to-eye with Marcus' predecessor, Tito Mboweni, because of his refusal to give Cosatu a platform to participate in policy discussions.

Early this year the union also called for Mboweni's head before his term was finished.

"Cosatu welcomed undertakings by the Finance Minister Pravin Gordhan and the new governor to open discussions on macro-economic policy," he said.

"The central message is that the overall recovery of the economy cannot occur in the context of old policies that have failed to deliver sustainable livelihoods and industrial structure."