Reading Time: 2 minutes

Better Than Expected Stats Help Rand Break R15/$

After some time hovering around the R15/Dollar mark the Rand has broken through this (psychological) barrier on the back of the release of GDP info.

It is no surprise that the SA economy has been hard hit by the Pandemic and lockdown and we all understand that things are going to be rough for some time to come (possibly years) however the markets look for any small indication that things may be heading in one direction or another.

The release of better than expected GDP performance figures gave the Rand the small boost it needed to gain some ground against the US Dollar. After trading for days around R15.11 – R15.30 /$ it was finally able to drop below R15/Dollar after the release of the information.

‘better than expected GDP performance figures gave the Rand the small boost it needed’

Another contributing factor is the mediocre performance of Brent Crude oil which is still down in the dumps following the price wars earlier in the year and a long year of suppressed transport and industrial usage.

All Time Low Earlier in 2020

This is something of a significant improvement considering that the Rand sunk to its worst ever performance being valued at R19.26 in early April 2020.

Such a rate can have a throttling effect on any import products and services (while being good for local exporters). SA exports slightly more than it imports (mostly to and from China, USA, India and Germany) so those exporting benefit. The challenge is the type of products and materials being sent out verse what is coming in and this has a direct impact on what people are paying locally for various imported products and services. This is why a lower Rand/Dollar exchange rate works out better for the “man on the street”.

It now remains to see if the Rand can cling to these gains in the months ahead.