{"id":116372,"date":"2016-03-13T19:30:05","date_gmt":"2016-03-13T17:30:05","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=116372"},"modified":"2016-03-14T12:33:14","modified_gmt":"2016-03-14T10:33:14","slug":"rand-vs-the-dollar-1978-2016","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/116372\/rand-vs-the-dollar-1978-2016\/","title":{"rendered":"Rand vs the dollar: 1978 – 2016"},"content":{"rendered":"

The rand’s weakness can be blamed on both local and international conditions – which has seen the local unit trade at its weakest levels in history against major currencies.<\/p>\n

The rand took a big knock in December 2015 – 9\/12 – after President Jacob Zuma unexpectedly fired finance minister Nhlanhla Nene, and replaced him with an ANC back-bencher David van Rooyen.<\/p>\n

Despite the president’s claims to the contrary, economists and analysts said the move had a profound impact on investor confidence in the country, leading to a mass exodus of capital.<\/p>\n

Combined with extremely slow growth, a widening current account deficit and one of the worst droughts in the country’s history, the rand has remained\u00a0stubbornly weak, unable to break back through R15 to the dollar.<\/p>\n

International factors<\/h3>\n

Global growth has slowed, led by China which has been unable to prevent\u00a0a slow down in its\u00a0markets. This in turn has led to a decline in demand for commodities (which hits South Africa hard, as China is one of our main importers).<\/p>\n

Sanctions have been lifted against Iran, which has resulted in an oversupply of oil in the global market, dragging the oil price down to below $30 a barrel.<\/p>\n

While the oil price has recovered in recent sessions – $40 a barrel – this reflects a short-term boon for the energy market, with many analysts expecting $30 a barrel to be the benchmark for the foreseeable future.<\/p>\n

These global factors, along with decisions made in big markets such as the USA, the UK and China, all have an additional impact on the rand.<\/p>\n

On Thursday (10 March), the rand flirted with R15.00 to the dollar – its\u00a0strongest point in recent weeks\u00a0– due to a decision by the European Central Bank to cut interest rates and expand its quantitative easing programme.<\/p>\n

However, it’s the local factors which will decide the rand’s future – with a looming credit rating cut to junk, and business-unfriendly economic policies threatening to push the currency even higher against the dollar.<\/p>\n

Rand history<\/h3>\n

Before 9\/12, South Africa’s weakest point against the dollar was R12.45 in December 2001.<\/p>\n

In December 2015, the rand crashed to R15.38, before getting within a fraction of R18 to the dollar in early January – though very briefly.<\/p>\n

The rand’s new (stable) record low is at R16.86, while it is currently trading at around R15.25 to the dollar.<\/p>\n

The graphic below shows the year-on-year changes in the rand for 11 March from 1978 to 2016.<\/p>\n

Two peaks prior to 9\/12 stand out, reflecting the economic fallout of the terrorist attacks on the United States on 9\/11 2001, and the global economic crisis which hit in 2008 and 2009, which led to a global recession.<\/p>\n

\"(click<\/a>

(click to enlarge)<\/p><\/div>\n

\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Year<\/th>\nRand vs Dollar (11 March)<\/th>\n<\/tr>\n
1978<\/td>\n0.87<\/td>\n<\/tr>\n
1979<\/td>\n0.84<\/td>\n<\/tr>\n
1980<\/td>\n0.81<\/td>\n<\/tr>\n
1981<\/td>\n0.79<\/td>\n<\/tr>\n
1982<\/td>\n0.98<\/td>\n<\/tr>\n
1983<\/td>\n1.12<\/td>\n<\/tr>\n
1984<\/td>\n1.20<\/td>\n<\/tr>\n
1985<\/td>\n2.00<\/td>\n<\/tr>\n
1986<\/td>\n1.99<\/td>\n<\/tr>\n
1987<\/td>\n2.09<\/td>\n<\/tr>\n
1988<\/td>\n2.11<\/td>\n<\/tr>\n
1989<\/td>\n2.53<\/td>\n<\/tr>\n
1990<\/td>\n2.59<\/td>\n<\/tr>\n
1991<\/td>\n2.63<\/td>\n<\/tr>\n
1992<\/td>\n2.89<\/td>\n<\/tr>\n
1993<\/td>\n3.19<\/td>\n<\/tr>\n
1994<\/td>\n3.42<\/td>\n<\/tr>\n
1995<\/td>\n3.63<\/td>\n<\/tr>\n
1996<\/td>\n3.95<\/td>\n<\/tr>\n
1997<\/td>\n4.42<\/td>\n<\/tr>\n
1998<\/td>\n4.98<\/td>\n<\/tr>\n
1999<\/td>\n6.15<\/td>\n<\/tr>\n
2000<\/td>\n6.39<\/td>\n<\/tr>\n
2001<\/td>\n7.77<\/td>\n<\/tr>\n
2002<\/td>\n11.47<\/td>\n<\/tr>\n
2003<\/td>\n7.91<\/td>\n<\/tr>\n
2004<\/td>\n6.71<\/td>\n<\/tr>\n
2005<\/td>\n5.85<\/td>\n<\/tr>\n
2006<\/td>\n6.28<\/td>\n<\/tr>\n
2007<\/td>\n7.39<\/td>\n<\/tr>\n
2008<\/td>\n7.99<\/td>\n<\/tr>\n
2009<\/td>\n10.32<\/td>\n<\/tr>\n
2010<\/td>\n7.46<\/td>\n<\/tr>\n
2011<\/td>\n6.91<\/td>\n<\/tr>\n
2012<\/td>\n7.59<\/td>\n<\/tr>\n
2013<\/td>\n9.11<\/td>\n<\/tr>\n
2014<\/td>\n10.79<\/td>\n<\/tr>\n
2015<\/td>\n12.26<\/td>\n<\/tr>\n
2016<\/td>\n15.23<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

More on the rand<\/h3>\n

Rand flirts with R15 vs the dollar<\/a><\/strong><\/p>\n

Weak rand curbs SA employers from hiring<\/a><\/strong><\/p>\n

Rand takes a dive amid SA political chaos<\/a><\/strong><\/p>\n

Rand takes a hit after budget speech<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The rand’s weakness can be blamed on both local and international conditions – which has seen the local unit trade at its weakest levels in history against major currencies.<\/p>\n","protected":false},"author":10,"featured_media":114832,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[11121],"tags":[26,3670],"class_list":["post-116372","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline","tag-rand"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/116372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=116372"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/116372\/revisions"}],"predecessor-version":[{"id":116638,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/116372\/revisions\/116638"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/114832"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=116372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=116372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=116372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}