Rand plunges below R7.50/$

fivelza

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Not so bad for the manufacturing industry that exports their product.
 

mikef

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Agreed but almost all electronics are imported - telkom might feel justified in increasing prices
 

Vio

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Problem is that everything becomes more expensive since we buy our oil in $. Not to mension electronics which are directly priced in dolars and pounds.
 

fivelza

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Agreed but almost all electronics are imported - telkom might feel justified in increasing prices
Problem is that everything becomes more expensive since we buy our oil in $. Not to mension electronics which are directly priced in dolars and pounds.
Quite correct gents, all imported products will become more expensive but then our exports can become more competitive again, which hopefully will help the manufacturing industry expand and create more jobs.
 

Sneeky

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The government has been hinting at a weaker rand for some time to shore up the export market..

Bad for manufacturing industry like us that is forced to import chemical commodities though.
sighs

A stable rand is all we ask for at what ever level they deem good for exporters, not one more volatile than old dynamite.
 

hj2k_x

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The government has been hinting at a weaker rand for some time to shore up the export market..

Bad for manufacturing industry like us that is forced to import chemical commodities though.
sighs

A stable rand is all we ask for at what ever level they deem good for exporters, not one more volatile than old dynamite.
They have done more than hint at it. It was clearly stated in the budget speech.
 

killadoob

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you need to have the rand at around 7.5 to 8

we need our exports to do well or ppl will go else where

if the rand is to low its great but not for exports

so where it is sitting now is a good balance on both ends
 

hj2k_x

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you need to have the rand at around 7.5 to 8

we need our exports to do well or ppl will go else where

if the rand is to low its great but not for exports

so where it is sitting now is a good balance on both ends
I agree.

Having it too strong just does not work because such a large amount of our GDP is derived from exports.

Sucks that we have to then pay more for the many things that we import like electronics and oil( which also drives most prices up due to transport costs), but that is just the reality of the thing.
 

Sneeky

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What changed hj2k_x is that they have not wanted to interfere in the rand but wanted it weaker, now they are prepared to manipulate it to a point that they deem is acceptable and keep it there, correct?

How does this help the current account, if at all?
Industry is still going to be importing huge amounts of commodities that are not available here and are necessary to feed our growth. Even cement manufacturers locally are importing to meet the demand.

Is there a breakdown available anywhere of what our net imports comprise of in this country? I would love to see one.
 

hj2k_x

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What changed hj2k_x is that they have not wanted to interfere in the rand but wanted it weaker, now they are prepared to manipulate it to a point that they deem is acceptable and keep it there, correct?

How does this help the current account, if at all?
Industry is still going to be importing huge amounts of commodities that are not available here and are necessary to feed our growth. Even cement manufacturers locally are importing to meet the demand.

Is there a breakdown available anywhere of what our net imports comprise of in this country? I would love to see one.

*Struggles to think back over the last three years of Macroeconomics lectures...

Well, yes, they have never interfered with it so much in the past, certainly not successfully. For me, with the current situation, this seems to be the optimal solution.

Another huge problem that the budget speech did not address that much was the crazy amount of debt in this country. As long as interest rates stay where they are, this is also set to continue.
 

Gnome

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I don't know much about economics so someone else who does might be able to clarify but doesn't this increase inflation? Thus in effect the industry won't have any net gain, I mean in the long term, because obviously in the short term they'll benefit.
 

Sneeky

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Well baas Tito has given the banks firm warning to curb irresponsible lending and tighten up on how they grant credit. There was a last dash for the line over the last say 6 months with everyone from cellphone operators to National Airlines jumping in to get a piece of the pie before the door is shut.

New guidelines due in July this year I think which includes granting of residential bonds (expect this to have a negative impact on the property market) and the banks made some lame statement last week about addressing the reckless credit they have been offering folks.
 

LoneGunman

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a financial question to the experts here - (and please remember, I am TOTALLY
IGNORANT re the overviews of financial markets)
I'm seeing a growing nervousness
on various sites, about a possible looming stock market crash - dow jones,
hang sen, nikkei etc, all down - and there's whispers that this might be the long feared meltdown of the global economy..
(No, I have no agenda's or insider info :p

Just from a theoretical point of view.. what, exactly would happen to SA
and the Rand, IF there was a complete crash of the various global markets?

I dont know enough about stock markets influence on real world issues, to
get a handle on how (if at all) this would affect SA, should the nikkei/hang sen/dow etc all go belly up..
What would this 'mean' practically and how would it affect folks on street level, in SA?
(Not the big companies or corporations - the average Joe Soap just doing their job)

EDIT: Nikkei down 2% in first 45 minutes
http://finance.yahoo.com/q/bc?s=^N225&t=1d&l=on&z=m&q=l&c=
LONDON down 1.5%
http://ichart.finance.yahoo.com/b?s=^FTSE
http://www.londonstockexchange.com/en-gb/pricesnews/prices/indices.htm
hang sen down 2.9%
http://finance.yahoo.com/intlindices?e=asia
Larouche saying the financial markets are disintegrating
http://www.larouchepub.com/hzl/2007/3409yen_carry.html
Fed says no more non traditional mortgages from today
"Federal bank regulators announced a crackdown on loose lending standards on subprime home mortgages as two major lenders struggled to cope with losses and regulatory problems"
http://users2.wsj.com/lmda/do/check...17286729439625151.html?mod=home_whats_news_us
http://nychousingbubble.blogspot.com/
 
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F

Fudzy

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I think we'd see a dive like we did at the end of 2001, probably a bit worse.
 

fivelza

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LG, it depends who you listen to as to what the cause and ultimate effect would be. There is a view out there that stock markets have gone up to much and this is an inevitable correction i.e. the shares are overvalued.

One consequence, which will have a direct effect on all working people is that pension and provident funds have invested in shares and they expect a return on this investment. Were the markets to 'crash' a lot of your retirement fund could be wiped out.
 
F

Fudzy

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Even at a dive like that we still have a stronger currency than most African countries out there.
 

LoneGunman

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'retirement fund'? I don't do that sort of thing:p

Okay, so the direct effect would be - for folks who have put savings in
one or another bank/fund - those savings would be gone. Would that be
also true of 'regular' banks? (ie - average persons normal accounts) or
does that sort of apocalyptic scenario only happen when a bank ( or all banks) fail?

(I've been idly looking at buying little kruger rands - the smallest ones..
I dunno the rules on
gold ownership back in SA, but here in the US, it seems fairly simple - you
just buy it, no problem..
Was thinking in worst case scenario's, having a few handfuls of tradable,
known value precious metal coins, when everyone around you has worthless
paper, could mean the difference between eating and starving..

When I was in SA, I kept asking FNB about the legality of gold ownership,
but they didnt know, and seemed uninterested in helping me find out..
 

fivelza

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LG, I would point you to a site called www.moneyweb.co.za , they have transcriptions of their daily shows on their site where they discuss many of the issues you raise in plain English.

To your question regarding the effect on regular banks, there are strict Reserve Bank requirements of where and how they may invest depositors funds.
 
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