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.”
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Source: SABC News (sabcnews.com)