Why the rand is so weak

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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atomcrusher said:
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
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Not a reason at all..

Losing control of your monetary policy is never a good thing.
 
After reading the article and your comments I’ve come to the conclusion that the Rand is either old and needs to retire or that it is lazy and is waiting for better days that will never come.
To resolve the situation of a weak Rand I suggest that we should make use of monopoly money or alternatively send it to a gym, for a bit of exercise, and thus gaining the much needed power. :rolleyes:

Realistically I hope Government will be able to address the factors that is devaluating the Rand before it is too late.
 
atomcrusher said:
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
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Have you considered the effect of the Smithsonian Agreement?

http://en.wikipedia.org/wiki/Smithsonian_Agreement

In essence, the US Dollar was fixed to a gold standard until 1971 and a fiat currency from that point on, and other currencies were pegged to the USD. We were a big gold supplier, so our currency had to be strong against the USD.
 
I think I am the only person this side of the border who wants the Namibian Dollar to break rank with the SARand, especially if we hit oil one day.....
 
Valerion said:
Have you considered the effect of the Smithsonian Agreement?

http://en.wikipedia.org/wiki/Smithsonian_Agreement
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No I had not, and thanks for the link .. interesting reading.

But I still maintain that I would have been better of if I had exchanged all my ZARs to USD at the long-ago exchange rate of USD 1.00 = say ZAR 2.00 rather than the current USD 1.00 = ZAR 11.00.

Yes I know that's all hypothetical and that the reality is that, as a South African, & so subject to exchange controls, I need ZAR's for my day-to-day living.

I can only see our ZAR weakening further as time passes. Does anyone really believe our ZAR will strengthen, in the longer term, against any major world currency? I can't see that happening at all, and it will almost certainly continue to weaken vs other major currencies
 
atomcrusher said:
No I had not, and thanks for the link .. interesting reading.

But I still maintain that I would have been better of if I had exchanged all my ZARs to USD at the long-ago exchange rate of USD 1.00 = say ZAR 2.00 rather than the current USD 1.00 = ZAR 11.00.

Yes I know that's all hypothetical and that the reality is that, as a South African, & so subject to exchange controls, I need ZAR's for my day-to-day living.

I can only see our ZAR weakening further as time passes. Does anyone really believe our ZAR will strengthen, in the longer term, against any major world currency? I can't see that happening at all, and it will almost certainly continue to weaken vs other major currencies
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On a micro scale (to you personally) yes it would have been better for you to do that back then, and to run completely in USD.. but from a macro economic and just basic economy point of view it would be a VERY bad thing.
 
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