Why the rand is so weak

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Why the rand is so weak

The South African rand has broken past R11.00 to the US dollar, and prospects are not looking good for the currency heading to the last quarter of the year.
 
The reasons given in that article for the weakness by our economists aren't new, they're issues that have been with us for years or months (labour).
 
Yup,

Most of the issues (from my point of view) seem to revolve around our incredibly weak political leadership...
 
ToxicBunny said:
Yup,

Most of the issues (from my point of view) seem to revolve around our incredibly weak political leadership...
Click to expand...
Lord if they knew the truth the rand will be around R20 to the dollar
 
R13... said:
The reasons given in that article for the weakness by our economists aren't new, they're issues that have been with us for years or months (labour).
Click to expand...

It takes that long for the effect to become noticeable. One strike every now and then is fine, but multiple strikes every year is not. People eventually get fed up...
 
Our macroeconomic policy is basically rudderless. Poor leadership has lead to total uncertainty about where we are going. Money runs away from uncertainty.

Half the cabinet are communists who want greater state intervention, the rest favor the free market and economic liberalization. The buffoon we call president just wants to make everyone happy, when he's not too busy trying to cover his butt or keep up with his harem.

Industrial action is allowed to drag on for months destroying entire industries with not so much as a comment from the political leadership, let alone any visible attempt to resolve the issues. Politicians have free reign to say whatever they want, the more damaging to business and job creation, the better, or so it seems. In fact, the entire government leadership seems to be totally out of touch with reality. When we are measured as having the worst education system in the world, it is dismissed as a "perception". Crime, pfft, what crime?

If we carry on like this, the R/$ 11 rate will one day soon look heavenly.
 
garp said:
Our macroeconomic policy is basically rudderless. Poor leadership has lead to total uncertainty about where we are going. Money runs away from uncertainty.

Half the cabinet are communists who want greater state intervention, the rest favor the free market and economic liberalization. The buffoon we call president just wants to make everyone happy, when he's not too busy trying to cover his butt or keep up with his harem.

Industrial action is allowed to drag on for months destroying entire industries with not so much as a comment from the political leadership, let alone any visible attempt to resolve the issues. Politicians have free reign to say whatever they want, the more damaging to business and job creation, the better, or so it seems. In fact, the entire government leadership seems to be totally out of touch with reality. When we are measured as having the worst education system in the world, it is dismissed as a "perception". Crime, pfft, what crime?

If we carry on like this, the R/$ 11 rate will one day soon look heavenly.
Click to expand...

Nailed it..

And our government is only interested in helping themselves at expense of SA. Scary part.. 62% of people in SA agree with government...
 
I doubt there are many African countries whose currency has the potential to maintain strength against major world currencies such as the USD (with the possible exception of the Botswana Pula)

It's time SA dumped the ZAR and adopted the USD, (as Zim did) before the ZAR weakens to R15+ and weaker vs. the USD
 
atomcrusher said:
I doubt there are many African countries whose currency has the potential to maintain strength against major world currencies such as the USD (with the possible exception of the Botswana Pula)

It's time SA dumped the ZAR and adopted the USD, (as Zim did) before the ZAR weakens to R15+ and weaker vs. the USD
Click to expand...

:wtf: That is a bit of a strange opinion to hold...

Zim only ditched their own currency when their economy had pretty much entirely collapsed.
 
atomcrusher said:
I doubt there are many African countries whose currency has the potential to maintain strength against major world currencies such as the USD (with the possible exception of the Botswana Pula)

It's time SA dumped the ZAR and adopted the USD, (as Zim did) before the ZAR weakens to R15+ and weaker vs. the USD
Click to expand...

The problem with dropping a local currency is that you lose an aspect of monetary policy. The SA government would no longer have control of the money supply, or be able to print extra currency when it is needed.

Printing notes also generates an income for a country, as it costs less than R10 to produce a R10 note. This income would be lost by using a foreign currency.

Variable exchange rates also allow for competitiveness. At different times it is good to have a high or low exchange rate.
 
cr@zydude said:
The problem with dropping a local currency is that you lose an aspect of monetary policy. The SA government would no longer have control of the money supply, or be able to print extra currency when it is needed.
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I don't see a problem with those restrictions, particularly in the current SA circumstances. And in particular the reckless printing of extra currency is a dangerous policy, except to replace worn / damaged notes. And that has to be strictly controlled.
Back in the 1970s the ZAR was worth more than the USD .. I recall an exchange rate of 1 ZAR = USD R1.43 when I set up a manufacturing business in the old Western Transvaal.
Compare that to the current 11 ZAR = 1 USD
 
ToxicBunny said:
:wtf: That is a bit of a strange opinion to hold...

Zim only ditched their own currency when their economy had pretty much entirely collapsed.
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All the more reason to adopt a stable, currency while our ZAR has not quite reached the 'entirely collapsed" phase.

Look, I am no financial expert, but if I had the chance right now to convert all my RRRs into a more stable currency, I do believe that my own wealth would be more protected than if I kept all my money in the ever-depreciating ZAR
 
This is very good news for me. I have a local business online and only accept payments in US$ via Paypal.
 
House said:
This is very good news for me. I have a local business online and only accept payments in US$ via Paypal.
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Will mean very little when higher inflation nullifies any exchange rate benefit that you may derive in the short term...
 
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