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Question of the Day: Are you keeping your Prime subscription?
The rand is tanking
- Thread starter BusinessTech
- Start date
Then why do countries like China intentionally devalue their currency in these times?
The_Ogre
Honorary Master
Australia is a first world country. Just saying
China sneezed.
And it doesn't matter how we look at it. The world economy has not yet recovered from the Financial meltdown of 2008. US Fed pulled every possible lever to keep the US economy up and running. China's GDP numbers are the same quality as their William Nicol street products. Europe had a Greek tragedy (which is a side-effect of the meltdown). In effect, the can was just kicked further down the street and now the hangover is here.
Mephisto_Helix
Resident Postwhore
The_Ogre
Honorary Master
Mainly because it will be cheaper for them to export; to be more competitive, globally.
marine1
Honorary Master
Retarded to think our mess isn't contributing. Mining collapses. Electricity. Taxes on everything increasing. Fuel tax increases. Downgrades etc etc etc
Uh, yes. Forex is percentage based.1 Australian Dollar equals
0.72 US Dollar
yeah, they're experiencing the same as us
For China a devalued currency makes sense, as they are self-reliant (outside of exports). We are not. Everyone suffers when the currency goes down in South Africa, except multinationals.
Ho3n3r
Honorary Master
It's pretty much tanking compared to the Aus $ too - http://www.x-rates.com/graph/?from=AUD&to=ZAR&amount=1
ISP cash cow
Executive Member
We are importers, we have tried to hold out for as long as we can but we are going to have too increase our prices soon.
Looney
Executive Member
In the same situation. Also importing from China but pay in U.S. Dollars. Our prices are already considered expensive and now we will have no choice but to increase our prices. We have also tried to hold out as much as we can but it's simply impossible anymore. What worries me is that our prices are going to be so expensive that we will basically lose all business and may as well close our doors.
OK. So the rand is tanking because the Chinese economy was tanking. So when the Chinese economy was booming and the rand was tanking, what was causing the rand to tank ?
I would agree that the Chinese economic problems are causing the rand tank faster than usual, but in my view, the rand is always going to be on a steady downward trend because, relative to the populations of SA's trading partners, the average skill and productivity in SA is going downwards all the time. There will be periods of correction where the rand will improve, but these will not change the general downward trend.
Unless something is done about the skills and productivity.
Unfortunately it takes at least a generation to even begin to address skills on a national level. And there doesn't seem to be any attempts to start.
Productivity improvements requires political courage and will, and there isn't going to be any of that for a very long time.
I would agree that the Chinese economic problems are causing the rand tank faster than usual, but in my view, the rand is always going to be on a steady downward trend because, relative to the populations of SA's trading partners, the average skill and productivity in SA is going downwards all the time. There will be periods of correction where the rand will improve, but these will not change the general downward trend.
Unless something is done about the skills and productivity.
Unfortunately it takes at least a generation to even begin to address skills on a national level. And there doesn't seem to be any attempts to start.
Productivity improvements requires political courage and will, and there isn't going to be any of that for a very long time.
Which means people are buying local alternatives? That's a macroeconomic win.
F
Fudzy
Guest
I've been at an IT distributor for less than 18 months ; in that time the price of my product is 25% more than it was when I started
Not to mention pissing off your boss. Poor timing all round.
What can is that? AFAIK the US government recovered vast amounts of money back from the banks and some banks paid back what they owed at a faster rate than required so they would have less federal oversite (as that was a requirement in the bailout). So Im not sure what can you are referring to.
As far as I can tell this crash is caused by the overvaluation of the chinese stock market and not to anything related to 2008? Or am I missing something?
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Ockie
Resident Lead Bender
Why are some countries allowed to artificially devalue their currencies like China does? Surely that is against some kind of international trade agreements? Why then do other countries float their currencies and let the market determine their value?
marine1
Honorary Master
Exactly
It goes against the whole international trade ethos thing, but I guess at the end of the day, China will do what it pleases. Even if it upsets the rest of the world.
Strange, I thought China imported most of its heavy metals and the large amounts of the resources it needs for its production. AFAIK they are the reason even normal metals have being going up in pricing. Its good to hear that they have managed to deal with this bottleneck.