April through September), the rand weakened significantly. While the USDZAR spot exchange rate is quoted and exchanged in the same day, the USDZAR forward rate is quoted today but for delivery and payment on a specific future date. [3] This was accompanied by a radio jingle, to inform the public about the new currency.[4]. administrator of Cape Town. [14], Following the United Kingdom voting to leave the European Union, the rand dropped in value over 8% against the US$ on 24 June 2016, the currency's largest single-day decline since the 2008 economic crash. A trade deficit is when imports exceed exports, indicating a negative trade balance. Security features introduced on the coin include a bimetal design (similar to the €1 and €2 coins, the Thai 10-baht coin, the Philippine ten peso coin [the coin was changed the composition to nickel-plated steel in 2018], the British £2 coin, and the Canadian $2 coin), a specially serrated security groove along the rim and microlettering. [34] These contained the same denominations of 10-, 20-, 50-, 100- and 200-rand. [2] It replaced the South African pound as legal tender, at the rate of 2 rand to 1 pound, or 10 shillings to the rand. "[9] By the end of 2014, the rand had weakened to R 15.05 per dollar, partly due to South Africa's consistent trade account deficit with the rest of the world. As an emerging market currency, the ZAR is also susceptible to factors such as: When a pandemic such as Covid-19 affects the global debt market, reducing the availability of capital to invest in emerging countries, economic growth is likely to slow and the currency’s value depreciates. However, during the second and third quarters of 2006 (i.e. 72% of retail investor accounts lose money when trading CFDs with this provider. Coins were introduced for the 2- and 5-rand, replacing the notes of the previous series, mainly because of the severe wear and tear experienced with low-denomination notes in circulation. The increased demand reduces the supply of the currency, increasing the value of the rand. Afrikaans was the first language on the 2-, 10-, and 50-rand, while English was the first language on the 5- and 20-rand. The economy of the country is considered vigorous and healthy, creating an appealing destination for investments and capital inflows. "[8] In 2014, South Africa experienced its worst year against the US dollar since 2009,[9] and in March 2015, the rand traded at its worst since 2002. [10], The January drop in value was also partly caused by Japanese retail investors cutting their losses in the currency to look for higher-yield investments elsewhere and due to concerns over the impact of the economic slowdown in China, South Africa's largest export market. At the start of 2006, however, the currency resumed its rally, and as of 19 January 2006, was trading under R 6 to the dollar again. [11] By mid-January, economists were speculating that the rand could expect to see further volatility for the rest of 2016. The currency broke above parity with the dollar for the first time in March 1982, and continued to trade between R 1 and R 1.30 to the dollar until June 1984, when depreciation of the currency gained momentum. This could cause investors to seek more favourable opportunities in countries with stronger growing economies, and so the ZAR may depreciate. In June, printing of this denomination was moved from the South African Bank Note Company to Crane Currency's Swedish division (Tumba Bruk), which reportedly produced 80 million 100-rand notes. Contrarily, a trade surplus occurs when a country’s exports surpass imports, signifying a positive trade balance. [1] A Decimal Coinage Commission had been set up in 1956 to consider a move away from the denominations of pounds, shillings, and pence; it submitted its recommendations on 8 August 1958. Fitch downgraded the country to a lower level of junk status on April 7, 2020. Sign up and we'll let you know when a new broker review is out. By the time that State President P. W. Botha made his Rubicon speech on 15 August 1985, it had weakened to R 2.40 per dollar. A stalled mining industry in late 2012 led to new lows in early 2013. From 9–13 December 2015, over a four-day period, the rand dropped over 10% due to what some suspected was President Zuma's surprise announcement that he would be replacing the Finance Minister Nhlanhla Nene with the little-known David van Rooyen. The influence of interest rates on the ZAR is discussed above under the title, South African Reserve Bank (SARB) policies. The Economist published its latest Big Mac Index in July 2020, indicating that the South African rand is 67.4% undervalued against the US dollar. This was the fourth consecutive quarterly decline in the country’s GDP, the figures for the previous three quarters being: Q1/20 – minus 2%, Q4/19 – minus 1.4%, Q3/19 – minus 0.6%. These notes will circulate alongside the existing notes. Simply put, the Big Mac Index is used to determine whether a currency is undervalued, or too expensive. This downward slide could be attributed to a range of factors: South Africa's worsening current account deficit, which widened to a 36‑year high of 7.3% of gross domestic product (GDP) in 2007; inflation at a five-year high of just under 9%; escalating global risk aversion as investors' concerns over the spreading impact of the sub-prime crisis grew; and a general flight to "safe havens", away from the perceived risks of emerging markets. At the time, it had no permanent CEO, and Colin Coleman of Goldman Sachs in Africa said the company was "having discussions on solutions" on finding credible management. The real unemployment rate is a broader definition of unemployment, including people who have given up looking for employment, referred to as ‘discouraged work seekers.’ The real unemployment rate for the country was 42% in Q2/20, up from 39.7% in the first quarter of 2020. The rapid drop in value was stemmed when Zuma backtracked and announced that the better-known previous Minister of Finance, Pravin Gordhan, would instead be appointed to the post. In the 1990s, the notes were redesigned with images of the Big Five wildlife species. The Botswanan pula replaced the rand at par in that year. The ZAR appreciated a further R0.22 (1.30%) during September. Typically, an increase in the repo rate increases the value of the South African currency. For instance, if the Federal Reserve of the USA changes its interest rate, the South African currency is likely to experience short-term volatility. A smaller 1-rand note with the same design was introduced in 1973 and a 2-rand note was introduced in 1974. Direct access to our calendar releases and historical data. [19] In September 2017, Goldman Sachs said that the debt and corruption of Eskom Holdings was the biggest risk to South Africa's economy and the exchange rate of the rand. The rand (sign: R; code: ZAR[a]) is the official currency of South Africa. Download historical data for 20 million indicators using your browser. South Africa Currency: South African Rand. Before 1976, the rand was legal tender in Botswana. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Feature-rich MarketsX trading platform. The ​1⁄2-cent coin was last struck for circulation in 1973. In sterling terms, it fell from around 9.5% to just over 7%, losing some 25% of its international trade-weighted value in just six months. The USDZAR increased 0.0368 or 0.22% to 16.5593 on Thursday October 15 from 16.5225 in the previous trading session. A country’s trade balance has an effect on the value of its currency. However, the long-term effect was not as severe as initially expected and the ZAR has since recovered considerably from its weak exchange rate against the dollar in early April. The South African Reserve Bank shredded 3.6 million 100-rand banknotes printed by Crane Currency because they had the same serial numbers as a batch printed by the South African Bank Note Company. In addition, the notes printed in Sweden were not the correct colour, and they were 1 mm short.[31]. The SARB has put drastic measures in place to limit the negative impact of Covid-19 and the lockdown on the South African rand, such as: Moody’s was the last of the three major credit agencies to downgrade South Africa to a speculative investment grade on March 29, 2020. Similar to other free-floating currencies, the rand continuously fluctuate in relation to many factors, such as: Initially, the Covid-19 pandemic and the ensuing lockdown had a massive impact on the value of the South African rand, as can be seen in its 14.11% depreciation against the US dollar at the end of March 2020. The graph below also illustrates the South African rand’s fluctuations from 1 January to 12 October 2020. Other examples of US policies that influence the ZAR’s performance is the trade war with China and the politicising of a second Covid-19 stimulus package. This series includes notes of all denominations, 10-, 20-, 50-, 100- and 200-rand. The strength or weakness of the country’s economy can either boost or diminish the South African rand. Generally speaking, increased supply and lower demand cause the ZAR to depreciate, while increased demand and lower supply imply that the price of the rand will increase. This made the South African currency the ‘world’s most undervalued currency.’. The answer is undoubtedly yes. Vice versa, a low or declining GDP, signals a weakening economy with demand for products and services declining, causing the currency to depreciate. Coins were introduced in 1961 in denominations of ​1⁄2, 1, ​2 1⁄2, 5, 10, 20, and 50 cents. View a US Dollar to South African Rand currency exchange rate graph. In the case of a currency, it loses value. The recovery was short-lived, however, and by the end of 1989, the rand was trading at more than R 2.50 per dollar.