See hidden discussions | Win great prizes | Get free support
Now that whiney mcfeels is gone, why have we dropped to 13.50?
I am no economist (by even they cant fully explain these things 90% of the time) but there are several factors.
- US signalling that they will not raise interest rates just yet
- Brexit, althought i cannot figure out how a weak UK economy help us. It could be that they have low interest rates and their risk profile has inceased since Brexit so some of thier capital come our way because of our high interst rates.
- Elections demonstated that SA is an iherently stable country politically
- There has been a feeling for a while that the rand was under valued. part of this could be the normalisation in that direction
It is almost as if a good functioning democracy, improves the perception of a country to the rest of the world. I still feel we as South Africans do have things to be grateful for. I do remember the last time we had elections, the rand went up to like seven rand to the dollar for a while. It seems the elections have it in them to buy us a lot of good will in the 'overseas'.
the reason why it went to R7 had very little to do with our elections, the developed world was in the midst of financial crisis and saw emerging markets as good places to put their money.
The elections may have convinced a lot of business people that this is the emerging market for them. I'm not saying it is the only factor, but still seeing millions of people exercise the civic duty like this breeds confidence.