CURRENCY
The major force driving the rand has been the rates of exchange of emerging-market currencies as a group against the US dollar. If one could predict the direction of a representative sample of emerging-market currencies, one could predict the USD / ZAR exchange rate with a high degree of accuracy. Unfortunately, this is effectively a forecast of where the US dollar will move against the other major currencies, which remains a difficult task.
Nevertheless, the ratio of the USD / ZAR exchange rate to the basket of emerging-market currencies can help explain much of the rand’ s behaviour over the years. When the rand moves away from its emerging-market foundations, a movement back to equilibrium can be predicted with some confidence.
There has been very little change in the EM / ZAR exchange rates over the past 10 years. It is striking that, despite recent USD / ZAR strength, the ratio of the rand to emerging-market currencies is now close to one to one, even though the dollar now costs about 2.5 times its rand cost in 2000.
South-African specific risks have not been harmful as they have been in the past. Hopefully these risks will continue to be contained.
The rand can support competitiveness, but its volatility makes planning difficult. A weaker currency alone cannot deliver export-led growth if electricity, logistics, and investment constraints remain unresolved. The opportunity lies not only in a competitive exchange rate, but in creating the conditions for businesses to use it. �
* Disclaimer: Data compiled on 2 June 2026.
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