Tuesday, 8th April 2008 at 9:58 am
The Rand awaits the MPC

therandtoday74.jpgThe Rand has gained strength against the US dollar over the last couple of weeks. Not too long ago, the local currency was trading at around R8.10 against one US dollar but several factors including the weakening of the US dollar have seen the Rand now trading around the R7.70 mark against the green back.

Some also attribute the strengthening of the Rand to a potential change in Zimbabwe. A new government in Zimbabwe could signal a more stable and better economy for our neighbours in the north. South Africa and Zimbabwe have forged strong trading ties over the years and a strong Zimbabwe economy can only better the South Africa economy. But as things stand now, there is still not a clear cut answer whether there will be a change in Zimbabwe.

Of equal importance with regards to the Rand is the MPC (Monetary Policy Committee) meeting on Thursday this week when they decided whether or not to keep interest rates in South Africa where they are or increases them. Predictions are split about this decision. We at The Rand Today think that the rate will remain unchanged. But hopefully by 15:00 on Thursday we will know what the decision is.

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Comments

Roman on 8 April, 2008 at 7:19 pm #

Very interesting news do you expect this trend to continue? Do you think that the devalued dollar will drag down the economic growth of other countries?


Rander on 8 April, 2008 at 11:54 pm #

Not necessarily Roman, a weaker US dollar has its pros and cons. We see right now in South Africa that a ’stronger’ Rand is attractive for the importers and quite a lot of products are still imported by South Africa. Exporters largely want a softer Rand. It largely depends on the country as a whole and how best they want to ‘go forward’ based on the value of the USD.


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