This year, the South African rand was predominantly at the mercy of international markets, which resulted in a fluctuating price depending on the news coming out of America, Europe and Asia.
The euro-zone crisis was a lingering factor throughout the year, which sent the rand spiking upwards during times of unrest and uncertainty – vis-a-vis, the Greek economic turmoil.
The rand also reacted negatively when ratings agencies, Moody’s and Standard and Poor’s downgraded South Africa’s sovereign bonds to Baa1 and BBB, respectively. S&P’s rating cut was particularly scathing, in that it placed South Africa a notch below the other ratings agencies, and continued with a negative outlook.
The rand was also hit by local events, including uncertainty surrounding the political climate ahead of the ANC’s Mangaung conference, as well as the social impact of the Marikana mine incident.
The ensuing mining worker and truck driver strikes also had an impact on sentiment in the country.
In November, the rand was nearing its highest point for the year against the dollar (R8.96/$) on the backdrop of strain in the euro-zone – which was entering into a double-dip recession – as well as American markets being closed for Thanksgiving.
In December 2012, economists predict a recovery for the rand, as it hovered around the R8.55-R8.60 (21 December 2012).
Rand versus the dollar in 2012
|1 January 2012||R8.08|
|10 December 2012||R8.69|
|Highest close – 21 November 2012||R8.96|
|Lowest close – 1 March 2012||R7.44|
* Prices taken from xe.com (accessed 10 December 2012) and represent the rand value at close of markets
History of South African rand
|Year||Rand to Dollar|
Rand values are nominal measures from measuringworth.com (accessed 12 September 2012).