The rand has continued to strengthen this week and has now edged up to R15.26 against the US dollar – its highest level since early March 2020.
Economists say the rand and other emerging market currencies have strengthened against the dollars and a basket of other currencies for various reasons.
For starters, the dollar has weakened over the past few weeks and South Africa has seen some uptick in its exports.
A promising vaccine trial for COVID-19 from pharmaceutical Group Pfizer suggesting a high degree of effectiveness has also helped the local currency strengthen.
Independent Economist Christo Luus says the rand has wrapped up some gains from April to mid-October.
“With the US elections generally supporting risky assets, the rand has outperformed amongst a group of emerging market currencies. From the level of R19 to the dollar in April, the rand has slowly wrapped up some gains, moved to R16/R17 mid-October. So from an all-time low, the rand has now gained 24% in value. Another support giving to the rand is the recent recovery of exports relative to imports, which can be considered quite remarkable.”
The Relevance of US elections to African policy and economy:
