2015 year news

The biggest news story in South Africa was the currency of the country and  its depreciating nature and whether or not the US dollar will appreciate. This post will best explain the downfall of the rand without the technical language used in mainstream news articles. Basically since as early as June there were reports and uncertainty about the rand based on the fact the US economy was getting stronger. This affects the behaviour of investors, one would think an investment would be a long term commitment but alas it is dependent on the strongest and most stable economy therefore naturally investors are more attracted to the re-emerging market. This weakens the rand and since the rand is not a currency based on a long term plan hashtag just saying, the rand is not based on a goods producing market therefore a weak rand means an inability to buy imports as much this delays the flow of the economy and the flow of money. A weak rand in South Africa translates to the sort of panic that might exist in the government cabinet after an unpopular decision is made. The success of the US dollar was built on the rumours which surrounded the fate of the currency : the slowdown in China for the demand of minerals, the rumour of an increase in the federal reserve rate. There were other instances which affected the rand and in economic terms made it more volatile such as the South African financial budget speech where the top financial leaders of the country decided to give a pay increase during a recession mind you to state workers. There was also a major student protest which reflected the instability of the country by having public institutions halted by a decision to not increase school fees this showed the lack of control in the country as well as the non delivery of funding made 6 years prior for instance to have free education. This made investors uneasy and the lack of stability in the country was reflected in the rand. Overall the year which seemed like it would be hopeful set the country back and there was a great loss of confidence in the leadership, The rand has survived recessions and great changes in the country but only time will tell if it can survive the reliance on foreign direct investment and the reliance on more developed nations.

1 thought on “2015 year news

  1. Great post. Its interesting how you touched on different factors affecting the currency. I have a few questions.

    I think Foreign direct investment are currently one of the few factors that can make South Africa grow, especially since JSE listed corporates do not want to invest in the country. So without FDIs how do you think we can grow the economy, and thus make the currency more stronger?

    Foreign investors are very volatile and depend a lot on emotions, which is why I think you made a great a point, about the country’s instability causing the rand and economy to be this volatile.

    Do you think the ANC still has control over the matters of South Africa or do you think its time for a new party to take over.

    I love your posts keep writing, please.

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