Share

Economist warns on weaker rand

Johannesburg - The rand was expected to drop further in the lead-up to the holiday season, and could continue falling into next year, an economist said on Thursday.

The rand dropped this week to its lowest level in nearly four years, reaching R9 to the US dollar.

Chief economist at Standard Bank, Goolam Ballim, said the rand could weaken further in the lead-up to the end of the year and into 2013.

"There is a fear that it is likely to remain with us, and it suggests that it [the rand] is likely to be weak over the new term," Ballim said.

He said the depreciating rand also had the potential to "stoke inflation".

"It eventually translates into even higher electricity tariffs, tax rates and even higher prices for consumers," Ballim said.

This meant an increase in basic prices, and a reduction in buying strength.

Ballim said this could lead to impoverishment as the poor were most likely to be affected.

The depreciated rand could also make imports "pricey" and boost exports from South Africa.

Ballim said the rand had dropped for several reasons.

"Firstly SA exports have recently waned, and this is extended alongside output losses in the mining, and recently, the farming sectors," he said.

Downgrades by credit ratings agencies also played an important role.

"The downgrades signal that South Africa may be struggling to deal with lengthy socio-economic issues," Ballim said.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
24.02
-0.5%
Rand - Euro
20.51
-0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.6%
Platinum
900.15
+0.4%
Palladium
1,000.00
-0.2%
Gold
2,209.06
+0.7%
Silver
24.59
-0.2%
Brent Crude
86.09
-0.2%
Top 40
68,122
+0.7%
All Share
74,310
+0.5%
Resource 10
56,908
+2.2%
Industrial 25
103,615
+0.3%
Financial 15
16,488
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders