According to the 1944 Bretton Woods Agreement, the South African pound (1 [pounds sterling]) was fixed at an exchange rate equal to US$ 4.
1944- --Fixed but adjustable 1944: The South African Pound August exchange rate system remained the sole medium of 1971 exchange and legal tender in --Pegged to the Sterling South Africa.
Thus what the cabinet had hoped to achieve by the conclusion of the Japanese Treaty was undone by its reluctance to allow the South African pound to fall in value.
Despite the fact that finance minister Class Havenga and most cabinet members were capitalist farmers (O'Meara 1983, 40) who arguably had a direct interest in supporting the devaluation of the South African pound in order to promote agricultural exports, there was a strong desire on their part to demonstrate to the world the status of the Union as an independent-minded, self-governing state.
The Union was under pressure to protect its industries from the competition of cheaper imports flowing in from all nations whose currencies had dropped in value against the South African pound, and it reacted by imposing duties of up to 12.