The Rand weakened against the US Dollar yesterday in response to the RBA cutting its benchmark rate to a record low, and continued to soften after New Zealand’s central bank admitted to engaging in currency intervention.
At the current exchange rate 1 US Dollar will purchase 9.0382 South African Rand as of 10:50 am GMT
After the Reserve Bank of New Zealand admitted to selling off the ‘Kiwi’ in order to lower the currency’s exchange rate and protect the nation’s economy the Rand dipped slightly, hitting 9.0392 against the US Dollar.
According to one South African forex trader: ‘It is a reprise of the ‘currency wars’ talk that the Brazilians started after their currency gained against the Dollar. What people seldom realise is that the real effective exchange rate of the Rand is within 5 per cent of where it was at the start of this century.’
The Rand has also come under pressure from the expectation that the South African Reserve Bank will follow the example set by the European Central Bank and Reserve Bank of Australia and issue a rate cut.
Back in April South African Reserve Bank Governor Gill Marcus asserted that with rising food/oil costs and a weak Rand posing a threat to consumer prices, inflation is likely to edge above the central banks 3-6 per cent target range.
And with South African unemployment on the rise and the nation’s manufacturing and mining sectors stagnating, the economy needs the kind of boost a rate cut could provide.
As one Johannesburg based strategist commented: ‘Rate cuts in key economies beyond our borders further strengthens the case for the Reserve Bank to ease policy. Our base case remains for a 50 basis-point cut by the first quarter of 2014, but the risks are increasing that such a move could occur earlier.’
Current South African Rand (ZAR) Exchange Rates
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The South African Rand/US Dollar Exchange Rate is currently in the region of: 0.1107 <
The South African Rand/Euro Exchange Rate is currently in the region of: 0.0847 <
The South African Rand/Pound Sterling Exchange Rate is currently in the region of: 0.0714 <
The South African Rand/Australian Dollar Exchange Rate is currently in the region of: 0.1089 <
The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.0382 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 14.0050 >
The Euro/South African Rand Exchange Rate is currently in the region of: 11.8169 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.1801 >
The Canadian Dollar/South African Rand Exchange Rate is currently in the region of: 8.9524 >
(Correct as of 10:45 am GMT)
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