It was a bit like a mouse trying to calm a herd of frightened elephants.
With both the world financial markets and South Africa’s political scene in turmoil, the country’s new president went on national TV Sunday promising to avoid any sharp changes in economic policy.
The morning after Kgalema Motlanthe’s speech, the rand currency slid even further. Investors are shunning emerging markets as just too risky.
An earlier speech by Reserve Bank chief Tito Mboweni had already exposed South Africa’s vulnerability to the global economic turmoil.
About 18 billion rand ($2.16 billion) has flooded out of the country so far this year as foreigners sold off stocks, he said.
South Africa, an economic powerhouse in sub-Saharan Africa, exports commodities such as platinum, gold and diamonds and was not really affected by debt related to bad mortgages.
But now it has been hit by the secondary effects of the American meltdown.
“We are seeing less capital being available in emerging markets generally and in particular South Africa,” said Jac Laubscher, an economist at Sanlam, a financial services group.
Gold traditionally is a refuge for investors in time of turmoil, and the increase in gold prices is good for South Africa.
But even more important to its economy is platinum, and its price has slumped about 50% since March.
South African gold trader Charles Leishman of Standard Bank said traditional instincts are sending people into the gold market. Meanwhile, platinum’s price was falling because of weak industrial demand.
“They’re actually very distinct, given the environment we’re in at the moment,” he said.
"[Platinum] is very demand driven. Gold at the moment is very emotionally driven.”