The ZAR Exchange Rate Thread

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maumau said:
an economist on 702 claims those in the know are not dumping SA investments, therefore he believes the rand has a chance of strengthening.

he says if it was on the road to nowhere the market would be flooded with investors pulling out.
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The rand is not weakening. It is fairly strong. The dollar is strengthening a lot
 
JStrike said:
Are you trying to imply the only time we would want to start import substitution is if are able to produce the best quality? Are you being serious? Surely you realise that would doom our economy to be a minor player forever
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What's dooming our economy is that the products are of inferior quality. We have a trade deficit so a weak rand is bad. We have to fix the trade deficit first by making more and better quality goods.
 
Swa said:
What's dooming our economy is that the products are of inferior quality. We have a trade deficit so a weak rand is bad. We have to fix the trade deficit first by making more and better quality goods.
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Right. Do you seriously think we can make the same quality goods at the same price as the Chinese, Vietnamese, etc?
 
JStrike said:
The rand is not weakening. It is fairly strong. The dollar is strengthening a lot
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Yup. Look at the 3 graphs below.

GBP vs USD

EUR vs USD

ZAR vs USD


They are all weaker because of the strengthening dollar. Comparatively, the ZAR has strengthened vs GBP and EUR since the beginning of March....but may follow their path
 

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JStrike said:
For inferior goods to decent quality?
The most famous is Hong Kong, and most recently China.
However you can include: Japan, Singapore and Mexico. Indonesia and Vietnam are rapidly improving in quality as well. USA also used to be low quality manufacturing in certain sectors once upon a time.

And interestingly enough, South Africa's high tech manufacturing (and exports thereof) are of fairly decent quality. Just not really cost competitive
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"Made in Taiwan" was the running joke when I was a kid for something considered inferior quality. There's no reason South Africa (with this exchange rate) can't experience something of a new industrial revolution. On the whole (as amazing as it sounds) Intellectually, educationally and infrastructure wise we are well placed relative to where the Asian tigers economies were 40 years ago. We just "rack drisiprin !" and hive mind.
 
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When I went to Europe in Sept last year it was R15 to the Euro, now it is R13.
 
Midnight_choir_drunk said:
"Made in Taiwan" was the running joke when I was a kid for something considered inferior quality. There's no reason South Africa (with this exchange rate) can't experience something of a new industrial revolution. On the whole (as amazing as it sounds) Intellectually, educationally and infrastructure wise we are well placed relative to where the Asian tigers economies were 40 years ago. We just "rack drisiprin !" and hive mind.
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Absolutely. But, our currency is too strong to do that at the moment though. Hell, even China still keeps its currency weak (Although as their manufacturing and exporting has gotten stronger, they are letting their currency strengthen a bit)
 
Thor187 said:
Jstrike posts
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Is that about how China started off with cheap, low cost manufacturing, and has now moved up the value chain (And their currency has been allowed to strengthen in response)?
I thought you didn't understand the point, or were wanting to present a theory to counter import substitution and currency stabilisation
 
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JStrike said:
It forces import substitution. Which, while it might hurt some companies in the short term, that hurt is needed for the economy as a whole in the long term
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Well the Rand has been weakening for two decades now. By your reasoning we should be ultra-competitive by now, yet we are not?
 
Vrotappel said:
Well the Rand has been weakening for two decades now. By your reasoning we should be ultra-competitive by now, yet we are not?
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It has been weakening naturally. It needs to be artificially weak.
There is a world of difference between the two
 
JStrike said:
Is that about how China started off with cheap, low cost manufacturing, and has now moved up the value chain (And their currency has been allowed to strengthen in response)?
I thought you didn't understand the point, or were wanting to present a theory to counter import substitution and currency stabilisation
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He asked the relevance the picture had so I said it was relevant to your posts.
 
Midnight_choir_drunk said:
"Made in Taiwan" was the running joke when I was a kid for something considered inferior quality. There's no reason South Africa (with this exchange rate) can't experience something of a new industrial revolution. On the whole (as amazing as it sounds) Intellectually, educationally and infrastructure wise we are well placed relative to where the Asian tigers economies were 40 years ago. We just "rack drisiprin !" and hive mind.
Click to expand...

Reason 1 - labour in SA is poor and expensive
Reason 2 - Labour laws
Reason 3 - anti-business sentiment in ruling party
Reason 4 - power woes

Get the picture?
 
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