Most recent events in South Africa have got most South Africans and those with any dealing with its economy on their toes.
Political intricacies in the country are getting to the climax. The Dollar Rand Exchange Rate is not giving any positive sign that the economy of the country is healthy enough to face the future that seems pregnant with many uncertainties.
The present decade has seen the country lose enough economic movers to make any serious country worried. Various studies are suggesting that between 2000 and 2016, more investors have left the country than came.
Dollar Rand Exchange Rate
While those with forecasting abilities in the movement of the economy are doing their thing, the economic realities in South Africa is beating its way beyond predictability.
Dollar Rand exchange rate has been unfavorably interesting for the South African currency recently. The currency has kept fluctuating in its exchange against the dollar.
Between 2007 and 2016, the rand has experienced a bumpy ride against the dollar. In the start of 2007, the Rand was exchanged at 7.02R against the dollar. By June 30th, the Rand was at 7.03R against a Dollar, and by January 1st 2008, Dollar Rand exchange rate was at 6.85R to 1 Dollar. By June 30 however, the Rand had bowed to the Dollar at an exchange rate of 7.89 Rand to 1 Dollar.
January 2009 did not come with any promise for the Rand as it started at 9.47 Rand to 1 Dollar. By the middle of the month, June 30th, the exchange was at 7.71R to 1 Dollar. The Rand Dollar exchange rate continued thus:
|Year||1st January (Rand)||30th June (Rand)|
Dollar to Rand Exchange between 2010 and 2015
The above indicates that the walk of Rand against the Dollar has experienced a steady growth, and freedom is not anywhere close. This is as the year 2016 began with the rand going at 15.55R to 1 Dollar. By June 30th, the Rand had shown some signs of recovery when it slugged it out at 14.74 R to 1 Dollar.
The sigh of relief enjoyed by the Rand from this point to August 16th 2016, was however interrupted when the Rand began to rise again. On the 16th, the south African money was able to go at 13.29 Rand to 1 Dollar.
The forecast for Dollar Rand exchange rate between September 2016 and July 2018 shows that the Rand May fall to as low as 18.87R to 1$. This according to the forecast is likely to be in July 2018. The best performance of the Rand maybe in October 2016. Rand may pull out a maximum of 14.92 Rand against a Dollar. From this point, the forecast has shown that Rand may continue a steady fall. This fall may continue until it reaches the maximum 18.87R at the end of the forecast.
If these forecasts turn true then South Africa will need to belt up against inflation. The inflation rate in the country now is at 6%. Any further drop of Rand against the Dollar will get the inflation rate even higher.
These forecast however may surprisingly take a turn. That is if events in the country force the country to move for an aggressive economic reform. How far and how good the Rand will be able to Walk to freedom against the domination of the Dollar can hardly be told at the moment.
Financial Realities in South Africa
More than all the forecasts, the financial realities in South Africa is that the political drama in the country is biting on the economy. Beneath the loud political drama is the fact that soon the country may start losing its investors.
it is not certain how the exit of the Gupta Family will affect the South African economy. The Gupta family had control of over a large wealth in the country. Although the Gupta’s family have no good history in South Africa, they have contributed to the country’s economy by providing employment to so many.
While the country celebrates the exit of this family it mus answer questions regarding the transition of the empire. It should be of worry as well how well the large wealth will be controlled after buying.
The Guptas are only a chunk in the South African economy. However, with the country’s economy neither here no there, every Rand is important. More so, investors in the country are seeming reluctant to invest. If this continues for a long time, investors will soon find other places for their businesses.
With these captains of industry ready to jump off ship if things fail to straighten, it will be hard to tell how exactly the Rand’s rudder can be controlled against the tide of the massive Dollar.