The South African rand traded at its worst levels since 2002 this week. Put another way, the last time the rand hit such a low, the price of petrol was under R4.00 per litre in Gauteng.
The local currency traded at R12.19 to the greenback on Thursday (12 March), having slumped to a 13-year low of R12.38 to the dollar on Wednesday.
According to data from Trading Economics, the South African rand has averaged R4.97 to the dollar between 1972 and 2015, reaching an all time high of R12.45 in December of 2001 and a record low of R0.67 in June of 1973.
The rand is one of several currencies to hit new lows against a rampant dollar, following positive employment data out the US last week.
The Brazilian real has pushed to almost 11-year lows; the Japanese yen is at a eight-year low; the Swedish krona is down to a six-year low and the Euro is teasing parity with the dollar at a new 12-year low.
According to Reuters data, concerns out of Europe and Asia – particularly doubts over Greece’s debt talks, and deflationary pressure in China – have also weighed emerging market currencies down.
The South African rand faced a rocky 2014, and has continued to slide in 2015, breaking through several resistance levels.
While the currency is currently at the mercy of global markets, a number of local factors have also contributed to its weakened position.
Economists laid the blame at the feet of an increased current account deficit, insufficient local savings, weak GDP growth and the ongoing power crisis.
In 2014, South Africa experienced its worst year against the US dollar since the peak of the global economic crisis of 2008 and 2009.
What a weak rand means
A devalued rand has many unfortunate knock-on consequences for SA consumers. As the rand weakens, so interest rates rise, hurting small businesses, home owners and indebted citizens.
The price of oil, and therefore the price of petrol also increases, which has an additional inflationary effect, including higher food prices.
Here is a look at the rand versus the dollar (annual averages) since 1994.