The ZAR Exchange Rate Thread

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Not too sure, but we defiantly won't see R10/$ anything soon, the time we have seen that was during recessions, 2001 and 2008.
 
TonyHawk said:
I believe if the Rand is left alone by the reserve bank... it should stabilize to between R3.50 & R5.50.. despite the ANC's shenani.gans ;)
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Firstly, the Reserve Bank is separate from the ANC.
Secondly the Reserve Bank has done a marvellous job weathering us from the recent recession with their policies.
Thirdly, R3.50 to R5.50 is way to overpriced, our economy would tank as nobody would buy our goods.

Our currency is influenced and valued by market forces, the ANC has nothing to do with it
 
boramk said:
Firstly, the Reserve Bank is separate from the ANC.
Secondly the Reserve Bank has done a marvellous job weathering us from the recent recession with their policies.
Thirdly, R3.50 to R5.50 is way to overpriced, our economy would tank as nobody would buy our goods.

Our currency is influenced and valued by market forces, the ANC has nothing to do with it
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1. Still take orders from the ANC... though influenced by knowledgeable people
2. I agree.. but they are still keeping the rand from strengthening
3. Some win (exporters) & most lose (importers & then mainly us .. the purchasers of high priced goods)... because of an over priced rand

Sounds like only a few score while the rest have to face the cost of over-priced goods
I know it's not all that simple... but we need to rethink our strategies... not milk the poor
But I guess others will say that they can be thankful they have jobs... but that money doesn't go far.. or does it?
 
boramk said:
Firstly, the Reserve Bank is separate from the ANC.
Secondly the Reserve Bank has done a marvellous job weathering us from the recent recession with their policies.
Thirdly, R3.50 to R5.50 is way to overpriced, our economy would tank as nobody would buy our goods.

Our currency is influenced and valued by market forces, the ANC has nothing to do with it
Click to expand...

Our goods need to become competitive with the rest of the world. We need to quit exporting raw materials only to have to import finished goods. We should be exporting yes... but also start producing our own finished goods here at reasonable rates. We need to become a self-sustaining economy if we want to survive future recessions that will inevitably come. The stronger economies need to start paying more for our raw materials.
 
TonyHawk said:
1. Still take orders from the ANC... though influenced by knowledgeable people
2. I agree.. but they are still keeping the rand from strengthening
3. Some win (exporters) & most lose (importers & then mainly us .. the purchasers of high priced goods)... because of an over priced rand

Sounds like only a few score while the rest have to face the cost of over-priced goods
I know it's not all that simple... but we need to rethink our strategies... not milk the poor
But I guess others will say that they can be thankful they have jobs... but that money doesn't go far.. or does it?
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1. No they don't. Gill Marcus and Tito never had to listen to what any of the ANC members had to say.
2. How so? They keep our interest rates high, which strengthens the rand already, raise it more and we won't have any growth.
3. All lose. Jobs will be cut left right and centre. Foreign reserves run dry within a month. Crime is only one of the run offs.

We can't make the rand stronger unless we fix it, otherwise, the Rand's price is determined by demand and supply market forces. We don't have the foreign reserves or goods in demand enough to manage a fixed exchanged rate. Ergo no, a strong rand is bad for SA. A weaker rand is good.
 
Garyvdh said:
Our goods need to become competitive with the rest of the world. We need to quit exporting raw materials only to have to import finished goods. We should be exporting yes... but also start producing our own finished goods here at reasonable rates. We need to become a self-sustaining economy if we want to survive future recessions that will inevitably come. The stronger economies need to start paying more for our raw materials.
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Unfortunately, our comparative advantage lies within raw materials so as long as the trade unions have so much power over wages.
Asian countries industrialised their economies with cheap labour that moved from raw materials to manufactured goods. As long as Cosatu and Co. are in power, SA's growth and dynamism is heavily bottlenecked
 
Garyvdh said:
Our goods need to become competitive with the rest of the world. We need to quit exporting raw materials only to have to import finished goods. We should be exporting yes... but also start producing our own finished goods here at reasonable rates. We need to become a self-sustaining economy if we want to survive future recessions that will inevitably come. The stronger economies need to start paying more for our raw materials.
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That makes total sense

boramk said:
Unfortunately, our comparative advantage lies within raw materials so as long as the trade unions have so much power over wages.
Asian countries industrialised their economies with cheap labour that moved from raw materials to manufactured goods. As long as Cosatu and Co. are in power, SA's growth and dynamism is heavily bottlenecked
Click to expand...

Agreed :(
 
boramk said:
1. No they don't. Gill Marcus and Tito never had to listen to what any of the ANC members had to say.
2. How so? They keep our interest rates high, which strengthens the rand already, raise it more and we won't have any growth.
3. All lose. Jobs will be cut left right and centre. Foreign reserves run dry within a month. Crime is only one of the run offs.

We can't make the rand stronger unless we fix it, otherwise, the Rand's price is determined by demand and supply market forces. We don't have the foreign reserves or goods in demand enough to manage a fixed exchanged rate. Ergo no, a strong rand is bad for SA. A weaker rand is good.
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The value of a currency is also a measure of the inflation experienced by the country. A high inflation economy will have a natural decline in currency value, if it doesn't, then the economy will ultimately experience a hard correction.
 
alloytoo said:
The value of a currency is also a measure of the inflation experienced by the country. A high inflation economy will have a natural decline in currency value, if it doesn't, then the economy will ultimately experience a hard correction.
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Our inflation is at a stable 3.2%, hence the rate cuts recently..
 
We will struggle to produce finished products because our work force is unstable and they are paid well compared to places like china and india.

You cannot compete with india and china in terms of finished products.
 
killadoob said:
We will struggle to produce finished products because our work force is unstable and they are paid well compared to places like china and india.

You cannot compete with india and china in terms of finished products.
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Mass finished goods especially. There are a lot of products made in South Africa, but most are destined for the local market - not for export.
 
Caution: In your calcs, make sure you are using the correct exchange rate -- if you are selling Rand to buy Dollars you must use the Sell Rate, which is currently 7.2458. If you are selling dollars to buy REand, use the Buy rate, which is currently 7.0223. Note the R0.22 spread.
 
Kilgore_Trout_Redux said:
In this economic climate not even the best economists in the world can predict what is going to happen next.
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Well price is determined by supply and demand, and no one can read and predict the thoughts (Demands) of over 6 billion people, so prediction is always going to be more of an art than a science.

We can try to logically infer what might happen...

Lowering interest rates means cheaper loans, which means it is likely for loans to increase. This increases the money supply and assuming production stays the same, then we whould have inflation (As loans are used to buy goods, thus increasing demand, thus increasing prices), which means a weakening currency.

But even though interest rates are extremely low in the US, people are going through rough times and a little common sense is creeping into their thinking, so they are less inclined to go back into more debt and more inclined to try and build savings, despite the cheap debt available. So despite the low interest rates, people are not taking loans and thus no expansion of the money supply in this way.

The US government has a greater debt burden than SA and thus it will probably print money to pay the interest on its debt and inflate their debt away thus weakening their currency relative to ZAR. However if foreign countries continue to buy US dollars (Who knows why, they are more likely not to), but if they do this will increase demand for US dollars, strengthening the dollar and since it is still the world's reserve currency, this phenomenon is unlikely to happen to SA in the same way.

It really all depends on what people do and there is no hard way to accurately predict how everyone thinks and behaves.
 
Rand soars to 2½ year high

http://www.fin24.com/Markets/Currencies/Rand-soars-to-2-year-high-20100922

Johannesburg - The rand has firmed to a 2½ year high against the dollar in early Wednesday trade on a faltering dollar and ahead of key economic data from the South African Reserve Bank on the country's national accounts.

The Bank releases its quarterly bulletin at 07:00 am, which includes spending figures and current account numbers for the second quarter of 2010. The economic report for the 2009/2010 financial year is also due at the same time.

The rand was boosted by a weakening dollar after the US Federal Reserve suggested it would provide further monetary stimulus to the US economy.

The currency touched a 2½ year high of R7.0475 earlier on Wednesday, after closing below the key R7.10 level on Tuesday.

As of 06:19 am, the rand was at R7.0495 to the dollar, 0.15% firmer than its New York close of R7.06.

"The announcement has caused a broad sell-off on the dollar and underscores the fragility of (the) global reserve currency in the face of large deleveraging risks," analysts at Tradition Analytics said in a note on Wednesday.

"This helped the rand firm up and will buoy local bonds."

Traders see further rand strength and believe it is likely to break through the R7.0 level unless the central bank increases its dollar buying for reserves.

Analysts are also waiting for the Bureau of Economic Research's survey of inflation expectations for the third quarter, which will give pointers to the market's thinking on the inflation outlook.

On the bourse, the stock market looked set to open higher, with the blue-chip Top-40 September futures contract up 0.14% ahead of the start of trade.

Stocks could be impacted by the release of retail sales figures for July at 09:30 GMT.

Government bonds were firmer, with the yield on the benchmark 2015 down 7 basis points to 7.23%, while that on the 2026 note fell by 7.5 basis points 7.95%.
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