Rand exchange rate - what's going on?

[Wimhotep]

@ R 8.40

 

[DefecteD]

@ R 8.40

VOMIT

 

[Eyenstyn]

R20 to the dollar by the end of the month

 

[Diplos]

If you're in the import or export business or if your business is sensitive to currency fluctuations in any way you should look at hedging with currency futures.

 

[Dolby]

R20 to the dollar by the end of the month

It's bad now, but not *that* bad

 

[Ockie]

My sister was stressing her ass off that the Rand might strengthen again after her HP stock landed @ R7.50. I bet she is laughing now.

 

[HavocXphere]

It'll recover.

Unless there is some underlying reason for the movement that I missed? Sounded to me like the traders just decided that selling Rand is the in thing right now.

 

[hoegh]

simple explanation gents, world market jitters (eurozone debt crises, downgrading US bonds, slugish global recovery) investors are pulling money from riskier investments (emerging market, BRICS) selling your local investments in local currency and then trying to exchange it for your first world dollars/euros, lots of rands flood the FOREX market and ultimately push the price up for dollars and euros and thus "weakening" the rand.

 

[noxibox]

Well on the plus size hopefully it will make our tourism industry more attractive to overseas visitors. Its taken a hammering since the World Cup. For a room I used to pay R1200 a night for a year ago I was quoted R350 a night last week.

The mines and unions must be smiling like idiots.

How much of that is prices returning to pre-world cup-inflated levels?

Once the price of food and fuel goes up the unions will have to wipe the smile off their face.

 

[killadoob]

It'll recover.

Unless there is some underlying reason for the movement that I missed? Sounded to me like the traders just decided that selling Rand is the in thing right now.

How can it recover if our government is devaluing the rand? I was chatting to someone who says the government is doing it because we are importing more than exporting.

How would the government do that though? Doesn't china do the same thing? If you look at greece if they were not locked into the Euro they could get out the trouble but they they cannot devalue the euro like we can the rand .

 

[HavocXphere]

How can it recover if our government is devaluing the rand? I was chatting to someone who says the government is doing it because we are importing more than exporting.

Huh? You must be chatting to a trader....they are always on the ball regarding market movements but the explanations for those movements are occasionally on the creative side.

The Rand is a floating currency. SA exchange policy is that its not actively managed. Market forces (imports & exports as you said) influence the rate, not gov.

China does actively manage their currency. The Greece thing I think is a bit different. They'd print money (if they could)...while I think China mainly actively managed their currency by buying & selling FX. i.e. The one increases the total money supply out there, the other doesn't.

On a side note...maybe the Rand is crashing because the traders think gov is out to get them.

EDIT: The direction is also wrong. If we're importing more than we are exporting, then on a net basis we are selling more Rands than we're receiving so the Rand should drop. So Gov would take steps to strengthen the Rand, not contribute further to its weakening.