n Farmer’s Weekly - A fistful of fingers : global farming

Volume 2016, Issue 16024
  • ISSN : 0041-848X



On 11 January, the rand reached an all-time low of R16,88 to the US dollar. At the time of writing, the value had improved slightly to between R14,50 and R15,50. Economists are divided on the future value of the rand. The group that takes part in the Economist of the Year competition estimates a value of between R13,95 and R20 to the dollar for the last quarter of 2016, with a consensus estimate of R15,90. If you ignore the extreme spikes caused by global crises, the long-term trend shows that the rand devalues by about 8% per year. Why is the rand weak? The price of a currency is determined by supply and demand. As the price is expressed in terms of another currency, the supply and demand of that other currency also influences the price.

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