When most of us woke up this morning, we were shocked to find the rand trading at new record lows. The rand had slumped below the R10/$ mark over night but it recovered in early morning trade today to the R9.79/$ mark. But as the day went on the rand started to loose on those earlier gains. During the course of the day, the rand reached a six year worst level of R10.8615/$. At 17:15 the rand was bid at R10.4490/$ from a previous close of R10.6687. It was bid at R14.0065/€ from a previous R14.3728 and at R18.0200/£ from R18.2950 before. Earlier it touched intraday worst bids of R14.5359/€ and R18.7383/£.

With the falling rand it is very unlikely that we will see a fuel price drop in South Africa. World oil prices continue to drop; many had thought this would be good news as the price of fuel would also drop but no such luck due to the depreciating rand. Unaudited figures, up to October 16, indicate it was possible the price of petrol could be reduced by up to 29 cents next month, and diesel could go down 23 cents, but this looks more and more unlikely each day the rand continues to drop.

After gains achieved in the last two days on the JSE, those gains were wiped out today as the local bourse lost nearly 7% following severe drops in overseas markets amid renewed fears of a global economic slowdown even after massive bank bailouts. Resources and platinum miners were the hardest hit, plummeting by more 11% and 13% respectively, as fears of global economic slowdown hit platinum group metals prices and all other base metals. Meanwhile investors still look towards gold as a safe haven but gold shares were unable to capitalise at the end of the day.

The all share index ended 6.99% in the red today, or 1 545 points, at 20 571.87, edging closer to breaching that 20 000 mark. Banks lost 1.26%, financials were down 2.91% and industrials shed 4.62%.

The rand was bid at R9.41/$ from R8.97 when the JSE closed on Tuesday, while gold was last quoted at $845.80 a troy ounce from $841.35/oz at the JSE’s last close.

Many people were surprised when they heard there was no Western Union in South Africa. Western Union are a world leader in global money transfers. It seemed that in almost every country across the world there was a Western Union but come to South Africa and you could not find Western Union. Well now that situation is finally over. Western Union together with local bank ABSA will from this month be rolling out the Western Union transfer service at selected branches across the country.

The rollout kicked off with a pilot run at the Carlton Centre branch in Gauteng during September 2008. Now it looks set that there will be Western Union transfer services at almost 200 branches within the next 12 months. This will not only mean good news for ABSA as it will be getting more business by having Western Union on board but also for people in South Africa who want to transfer money outside the country and receive money from those in foreign countries. Standard Bank have a similar arrangement with the Moneygram transfer service which has proved to be very useful for consumers. Now with the ABSA and Western Union link, the competition between ABSA and Standard Bank is set to continue.

After todays Reserve Bank monetary policy committee meeting, it was decided that the key repo rate would remain unchanged at 12% whilst the prime lending rate remains at 15.5% in South Africa. This following on from interest rates being slashed by most major central banks across the world inorder to inject some liquidity into the under pressure markets. South Africa, however, did not look set to follow suit as it does not suffer the same banking difficulties that the United States and Europe face and therefore didn’t need similar remedies, analysts told Reuters.

Reserve Bank governor, Tito Mboweni, was however not too sure how inflation in South Africa is going to pan out in the next couple of months. Mboweni forecast a moderate improvement in the inflation outlook and said it was expected to peak at an average 13.3 percent in the third quarter of this year but inflation hit the 13.6% mark in August this year. It may seem hard to see the rate of inflation coming back down to the target of 3-6% anytime soon but analysts are predicting this target to be reached in the second half of 2009.

For now its a matter of ‘play it as it is’. Interest rates could have gone up because of rising inflation or they could have gone done following the worldwide economic crisis but they remain as is.

Just when you thought the situation in Zimbabwe could not get any worse, official statistics released today (Thursday) show that Zimbabwe’s annual inflation raced to a record 231m% in July, up from 11.2m %the previous month. Central Statistical Office data showed that on a monthly basis, went up by 2 600.2% compared to 839.3% in June, largely driven by high prices of bread and cereals.

Many had hoped that an agreement which was signed between the political parties in Zimbabwe in September would lead to economic recovery in the country, but the parties are still not agreeing on forming a new government. The longer they disagree, the worse the economy is going to get. There is already no cash in the country and people are no longer allowed to carry out electronic banking transactions. The economy and the country are slowly getting to a grinding halt and once the economy collapses then what?

What a day for the rand! The rand spiked above the R9/$ level to R9.4595 - a level last witnessed in November 2002. The drop in the rand is been largely driven by the global market turmoil. Rate cuts by central banks around the world saw some currencies, including the rand, recoup some of their earlier losses but this did not last long. The Fed reduced its key rate from 2% to 1.5%, while the Bank of England cut its base lending rate by half a point to 4.5%, and the ECB, which last week decided to keep borrowing costs on hold, cut to 3.75%. Other central banks also taking part include the banks of Canada, Sweden, and Switzerland. Chances are very slim that South Africa will follow suite and also cut rate tomorrow (Thursday) with many analysts predicting rates to remain where they are for now.

At 15:50 the rand was bid at R9.3290/$ from a previous close of R8.9184. It was bid at R12.6867/€ from a previous R12.1303 and at R16.2431/£ from R15.6127 before.

As companies and organisations across the world try to weather the economic storm gripping the world, some countries are also under a lot of pressure. Some had thought that only businesses are being affecting but this crisis is gripping the whole world and even countries are getting into trouble, of note, Iceland.

Jason Simpkins from Money Morning takes a look at the current situation in Iceland:

The government of Iceland yesterday (Tuesday) pegged its currency to a basket of foreign currencies, nationalized its second-largest bank, and pleaded with Russia for a $5.4 billion loan - all in a desperate attempt to prop up the island nation’s ailing economy.

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