BRIAN KANTOR: How best to cope with unwelcome rand weakness
Any confident sense that SA can address its structural weaknesses will bring immediate reward in the form of lower interest rates and inflation
Déjà vu does not quite do justice to the recent turmoil in the SA currency and debt markets. The hope for a weaker dollar and the stronger rand — and the lower interest rates, inflation and faster growth that comes with a stronger rand — has once more been dashed.
Trade wars and currency manipulation do less damage to the US economy than to others, as it is less dependent on global trade and much more dependent on the US consumer. Hence in times of trouble, capital flows towards the US raise the exchange value of the dollar and depress bond yields. Emerging-market exchange rates weaken more than most and emerging-market bond yields rise rather than fall. And the rand generally falls more than most other emerging-market currencies...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.