The ZAR Exchange Rate Thread

[RexxGrim]

Exports become more competitive finally.
That and bringing in Euro's is much better!

A lot of the resouces required to produce the product that is exported, is imported. So this increases production costs. Its not all good news.

 

[Devill]

Sounds stupid. Investing based on sentiment=epic fail. Tbh, I don't believe it

I am sure you buy a lot of things on sentiment.

What car do you drive? What browser do you use? Phone? Where do you buy your groceries?

Sentiment plays a big part in everyday life and the financial markets

 

[thestaggy]

Why would we need a rate cut if we want a stronger rand or is it all about growth? .Surely we need a rate hike which will bring money here due to its increased yield and this inflow will strengthen the rand .Or am I missing something?

Rates are tricky. Low and they stimulate domestic growth and lower unemployment, but the side-effects are that your currency is weakened (becomes unnatrractive to foreign investors) and inflation increases. High and they lower domestic growth and increase unemployment, but your currency is strengthened (attractive to foreign investors).

It is a delicate balancing act and as one of SA's biggest social problems is unemployment, changes to the interest rate will be done with an eye on how unemployment is affected.

 

[thestaggy]

A lot of the resouces required to produce the product that is exported, is imported. So this increases production costs. Its not all good news.

+1

South Africa is still a net importer of capital goods.

 

[JStrike]

Why would we need a rate cut if we want a stronger rand or is it all about growth? .Surely we need a rate hike which will bring money here due to its increased yield and this inflow will strengthen the rand .Or am I missing something?

Why one earth would we want a stronger Rand??

 

[thestaggy]

Why one earth would we want a stronger Rand??

Complete failure to see both sides of the picture.

 

[MKFrost]

Sounds stupid. Investing based on sentiment=epic fail. Tbh, I don't believe it

You think sentiment plays no role in investments? Think again... sentiment can make or break a market

 

[Vrotappel]

Why one earth would we want a stronger Rand??

Becasue we are a net importer.

 

[Jola]

That's what I've been saying about foreign inflows and how quick they turn to outflows. If Gill Marcus is forced into a rate cut the outflows will increase

As I have been saying all along as well.

A rate increase could have alleviated this.

 

[Jola]

Becasue we are a net importer.

And because we don't want inflation to go through the roof.

 

[Jola]

It is a delicate balancing act and as one of SA's biggest social problems is unemployment, changes to the interest rate will be done with an eye on how unemployment is affected.

Destroying the economy in order to employ the unemployable is not going to help.

The long-term damage to the economy will outweigh short-term employment benefits.

Rather hike rates (if it is not too late) and try to get education sorted, so that longer term we can reduce the number of unemployable people.

Note : Fixing education does not mean spending more money on it, the problems are deeper than mere money.

 

[JStrike]

Becasue we are a net importer.

Making our exports competitive will allow many of our businesses to export in far greater quantities.

 

[Jola]

Making our exports competitive will allow many of our businesses to export in far greater quantities.

Nope, in most cases we would never be able to compete with the Chinese.

WRT to raw materials we already export as much as we can.

 

[Thingyyyyyy]

Making our exports competitive will allow many of our businesses to export in far greater quantities.

What do we export that we don't have to import material first? Food? But we import about the same amount so it's counter productive.
( I understand mining )

 

[Jola]

What do we export that we don't have to import material first? Food?

Even here we import farming equipment, certain fertilisers, and insecticides.

 

[Thingyyyyyy]

Even here we import farming equipment, certain fertilisers, and insecticides.

ah yes. Same goes for mining. Tx.

 

[Ockie]

My friend in the UK just told me that if the Rand goes to R20.00 to the Pound...then he will be looking at buying a property again in Cape Town. Already found a nice little 1 bedroom right on the beach for about 3 million. But only if it drops to R20.00 or more to the Pound. Bloody vulture! hahahahaha.

 

[JStrike]

What do we export that we don't have to import material first? Food? But we import about the same amount so it's counter productive.
( I understand mining )

Wasn't even thinking about the old, shrinking sectors. I was talking retail, services, software etc. The fast growing sectors

 

[antowan]

The RAND is bleeding!!!!

Lost 10c in the last 30 minutes!

 

[Cool E]

Lost 10c in the last 30 minutes!

link