BRIAN KANTOR: The rand is no tale of mystery
Movements in the exchange value of the dollar itself explains the direction of emerging market exchange rates
06 May 2021 - 14:25
South Africans are inclined to regard the highly variable foreign exchange value of the rand as a deep mystery. Yet there is nothing mysterious about the currency’s behaviour.
The daily dollar value of a rand has been closely tied to the value of other emerging market currencies ever since 1995, when SA opened up to global capital flows. When the ratio trends above or below the emerging market line the direction of the rand predictably reverts back to the average relationship of one to one. We have done no worse or better against the US dollar than the average emerging market economy...
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.