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Harare - The rallying rand which dipped to R12.48/$ on Thursday has been sweet news for Zimbabwean exporters, whose products will now be more competitive against those from South Africa.
READ: Mighty rand dips below R12.50/$
Local analyst Walter Mandeya said the strengthening rand against the US$ will make Zimbabwean products competitive against those made in South Africa.
"I think it's good for our local exporters as buyers from South Africa will need fewer rands to import from Zimbabwe. It makes our exports competitive again," said Mandeya, adding that local products will also be able to compete against imports from South Africa.
"A strengthening South African rand means imports from that country are no longer that cheap. You now need more US$ to get a few rands. As a result, local products are now competitive again on the local shelves,” said Mandeya.
He added that local services such as tourism also stand to benefit if the rand continues to firm.
“For example, something with a price of $1 now costs only R12.50 against R13.50 a couple of months ago. So the rand rally is good for Zimbabwe.”
The strengthening of the rand also comes at a time when Zimbabwean exports to South Africa declined 14% to $185m in February. Latest data from Zimbabwe's statistics office also shows that imports from South Africa intensified from $145m in January to $171m last month.
Mandeya said the strengthening rand will push up the import bill, as one now requires more dollars to import from South Africa.
