The ZAR Exchange Rate Thread

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Garson007 said:
Both in 2001 and 2008 the collapse was sudden. This is far more structurally driven.
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Yes, and the structures that are currently driving this are the improvements in the US economy and the uncertainty in the Euro Zone.
Both which are historically temperamental.
 
Garson007 said:
Both in 2001 and 2008 the collapse was sudden. This is far more structurally driven.
Click to expand...

Yes, and the structures that are currently driving this are the improvements in the US economy and the uncertainty in the Euro Zone.
Both which are historically temperamental.
 
grantza said:
opposite side of the fence here

every drop has me smiling more
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grantza, where do you work if you don't mind me asking?

I earn in dollars and everytime it drops I earn more so it kind of makes me smile, but it has me fearful as well.

Should I be pumping money into my SA bank account or keep a foreign bank account.

I used to pump in and pay debts when the rand weakens but I've been debt free for a while now. I like the idea of my bank balance getting bigger and bigger but I guess that big number is worth less and less.

What do you do?
 
grantza said:
opposite side of the fence here

every drop has me smiling more
Click to expand...

Well again, personally it suites me, however my company buys hardware in USD, but we sell some license in USD.
so here is a bit of a balance there.
We pay license to DE in EUR, which has not changed too much compared to USD.
(and we do a little bit of hedging there every month, plus the EU QE1 coming on line )

But as an economy as a whole, now the QE3 in the US is over, strengthening job market data, they are bound to change interest rates sooner rather than later. I believe this will effect our carry trade quite substantially considering SA's risk portfolio. Considering it is about time for the season for NUMSA & Co negotiations, and no backbone/direction from our government, I see us going to a dastardly rate to the USD in the next 6 months.

Seriously, we are a risk investment re FDI, only our dual listed companies will see investment, but that investment will probably be on the FTSE or another board.



my 2c
 
Nomad said:
grantza, where do you work if you don't mind me asking?

I earn in dollars and everytime it drops I earn more so it kind of makes me smile, but it has me fearful as well.

Should I be pumping money into my SA bank account or keep a foreign bank account.

I used to pump in and pay debts when the rand weakens but I've been debt free for a while now. I like the idea of my bank balance getting bigger and bigger but I guess that big number is worth less and less.

What do you do?
Click to expand...

i have 2 companies.
in both companies the major client is us based.
all billing is us based & paid into us based bank account.
money (us$) is "brought in" to meet local operational costs
my staff salaries are zar based, however in situations like this the benefit is passed directly on to them as well.


personally, i would keep the funds out of the country in a $ based account and use as needed, or when sudden exchange rate fluctuation like this occur
 
For once a weak ZAR favours me...busy clearing all my zar denominated debt and paying everything zar denominated I can think of (yearly subs).
 
Eish, our toys are going to get hellishly expensive.

I guess we can either feel sorry for ourselves or find a way to earn dollars.
 
JStrike said:
As detailed in the links above, it does help an economy to be more stable and competitive
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Bwahahahaha. Sure but it harms the economy in many other ways even worse. But do not let me disturb your dreamworld, dream on.
 
Seriously said:
Bwahahahaha. Sure but it harms the economy in many other ways even worse. But do not let me disturb your dreamworld, dream on.
Click to expand...

On the one hand we have a well reasoned argument by economists (One of which is a Nobel prize winner in Economics).
On the other hand we have your ramblings
 
JStrike said:
On the one hand we have a well reasoned argument by economists (One of which is a Nobel prize winner in Economics).
On the other hand we have your ramblings
Click to expand...

The Noble prize were given to many idiots before notably some South Africans so that REALLY means nothing to me but it means a lot to/for many idiots.

Then your poor economic ramblings maked a lot of sense....only in your mind. As I said do not be disturbed and carry on with your dream world.
 
It is a generally accepted principle that if your economy is export driven that a depreciated exchange rate will be of benefit- China, Japan, Asian tigers are all examples of this.

However if there are systemic issues in an economy(infrastructure, labour etc) such that supply cannot respond appropriately to a depreciated exchange rate, then the economy will be in for some pain.
 
JStrike said:
On the one hand we have a well reasoned argument by economists (One of which is a Nobel prize winner in Economics).
On the other hand we have your ramblings
Click to expand...

We're a net importer of capital goods. How on earth does a weak rand help us in the long game?

My dad's company, for example, uses imported German machinery. Everything has to be imported, including the spares and even the engineers as the local pool has dried up. What happens when companies such as his need to start replacing or repairing equipment and they can only buy rands with toilet paper
 
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