(3 minutes read)
· The rand was resilient despite concerns over the global surge of coronavirus cases and the release of data recently showing a plunge in factory output in South Africa
· The rand plunged to a low of under R19/$ in early April when South Africa entered its first month of lockdown, but has gradually been gaining ground since then
· One major reason for firming up of Rand is the low incidence of Covid-19 cases in South Africa as compared to the global toll
The rand was resilient despite concerns over the global surge of coronavirus cases and the release of data recently showing a plunge in factory output in South Africa. Also, the consumer confidence is the lowest since 1985 according to some agencies. The local currency opened trade at R16.83 yesterday (Friday) and was trading at R16.91 in the afternoon (14.04) Experts say that the relative strength of the rand can be attributed to the weakening of the US dollar due to the surge in coronavirus cases in the US and globally.
The rand plunged to a low of under R19/$ in early April when South Africa entered its first month of lockdown, but has gradually been gaining ground since then. One major reason for firming up Rand is the low incidence of Covid-19 cases in South Africa as compared to the global toll.
Also, there is a global realization that South Africa, with structural adjustments, which the country is committed to carry out, things, would look better in the future. Economists feel that there is a higher degree of transparency as far as the economic data is concerned since it is not hiding or falsifying data.
