Being low-key helps SA economy.(Commercial Review)(Brief article)

SOUTH AFRICA'S BANKING system is better placed to survive the world credit crisis than most, experts are arguing. The weak currency has strengthened exporters' hopes, government debt is down to less than one-third of GDP and the forex reserves situation is healthy.

Most of all the banking system is proving less prone to the sort of damaging rumours--some maliciously circulated--that have afflicted OECD countries recently, even hitting major US investment banks. So much concentration on the big players abroad has allowed the South Africans to get on with the job of improving power supplies, restoring manufacturing output, coping with Chinese competition in increasingly sophisticated businesses like light commercial vehicles and of course profiting from the record price of gold. SA's major banks are seen to be relatively strong institutions at a time when their rivals abroad are being scoured for weaknesses; African banking as a whole is a major growth area.

Most of all the current credit crisis is a rumour-dominated one: anticipated bad news becomes a self-fulfilling prophecy in a jittery market. So much of the attention of the money markets overseas is being spent on checking out the latest unlikely story that SA business is being left to get on with what it does best. Being out of the spotlight has never been so handy--and a magnet for volatile foreign funds looking for a safe home in troubled times. The perceived link with gold helps, too.

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