The Common Monetary Area (CMA) is a setup where Namibia, Swaziland and Lesotho all have their currencies pegged to the South African Rand (ZAR). What this means is that the countries maintain their currencies, but the exchange rate to the rand is 1:1. One is able to use the ZAR in these countries as a means of exchange.

Recently there has been talk of Zimbabwe being included in the CMA set up. The issue is: are both Zimbabwe and South Africa ready for this, and what would be the impact of this?

This arrangement would not make much difference for the Zimbabweans as the majority of the population is using the USD and ZAR as the economy has become more and more ‘dollarized’. What is likely to be of most concern is if this will mean that Zimbabwe will now have to follow South African monetary policies. With a country whose economy has been decimated, high interest rates and runaway inflation, how easy would it be to implement South African monetary policy to restore sanity in the Zimbabwean economy? All the other countries in the CMA do not necessarily follow the South African monetary policy, but their policies are closely aligned to those of South Africa.
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The first 100 days of President Barack Obama’s administration officially begin today (Wednesday). But the reality is that President Obama already has a solid head start, as he and his advisor have been working for months to establish the groundwork for one of the most ambitious - and most important - economic-stimulus plans in U.S. history.

President Obama’s team was hard at work weeks before his Jan. 20 inauguration, crafting an ambitious $825 billion economic stimulus plan, parlaying with the U.S. Treasury Department and Congress to ensure its speedy implementation, and assembling the team the nation’s 44th chief executive felt he needed to get the job done.

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The world’s largest gathering of mining industry stakeholders will reconvene on 9-12 February 2009 in Cape Town. Delegates appeared in record numbers to participate in last year’s conference, creating a near sell-out. Mining Indaba 2009 will include:

This is an opportunity not to be missed for those in the mining industry or those looking to find out more about this lucrative industry. Those who attend the Mining Indaba will have the privilege of hearing from speakers which include:

Be sure not to miss out on this great event. To register for the event and find out more about it you can click here or visit www.iiconf.com . TheRandToday.com will be present at the Mining Indaba and will be bringing posts throughout the duration of the event so be sure to stay tuned to find out what will be happening at the Mining Indaba if you are not present.

Just as you thought that the situation in the Zimbabwe economy could not get any worse, the country has now released a Z$100 trillion dollar note which last week would have been worth US$30. Other notes in trillion-dollar denominations of 10, 20 and 50 are also being released to help Zimbabweans cope with hyperinflation. In a statement on Thursday, the Reserve Bank of Zimbabwe said the notes will ensure that those in formal employment withdraw their salaries with minimal hassle.

“In a move meant to ensure that the public has access to their money from banks, the Reserve Bank of Zimbabwe has introduced a new family of banknotes which will gradually come into circulation, starting with the 10 trillion,” read the statement from the RBZ. With effect from January 12, workers can now withdraw their entire January salary in cash as long as they produce their current pay slips.
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So the woes of the rand continue. This is one currency which you can never predict. From ‘lows’ of 9.30 to the greenback a week ago to the ‘highs’ of 10.13 on Tuesday. So the question is…what is causing all this volatility?

This volatility can be attributed to a number of factors. There are three main issues in my opinion:

The first issue is the worsening recession fears. The flight of capital which was experienced when the recession fears became real last year has continued, albeit at a slower pace. The rally on the JSE experienced in the earlier part of the year has somehow come to an abrupt end. This has put some pressure on the rand of late.
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The South African rand took a knock yesterday after the Supreme Court of Appeal (SCA) reversed a decision to dismiss corruption charges against Jacob Zuma, making it possible for him to once again face charges. The issue of Zuma is important to the South Africa economy as chances are high that Zuma could be the next president of South Africa. Investors would be concerned about investing in a country where the president has criminal charges hanging over him. At 11:31 yesterday, the rand traded at R9.9350 versus the dollar after earlier falling to R9.98, compared to R9.9195 before the ruling. This morning the rand has further slipped as is now trading at around R10.13 to the dollar.

Compliments of the season. We are hoping that you have a great holiday period and you have started 2009 on a great note. Most of you have still be on holiday and have returned back to the office today. Business really starts today for many who are returning from holidays and so to TheRandToday.com team. We have had a great break and are ready to kickoff 2009 and keep you updated with all the news that matters to you from the Rand. For many, 2008 was not a great business year but we are hoping 2009 will bring us better relief. It has started rather well with the decrease in petrol prices and hopefully there will be another interest rate cut soon; if that does not get your 2009 off to a good start then I do not know what will.

Wishing you a great 2009 again and thank you for your continued support of TheRandToday.com