The rand broke through the R20 to the pound level on Wednesday and dropped to R12.82 to the dollar.
Although very weak, the South African currency is still faring better than emerging market currencies such as those of Russia and Brazil.
Dollar strength and an impeding rate hike in the US seem to be the main forces driving the rand down.
The Money Show’s Bruce Whitfield interviewed Kevin Lings, Chief Economist at Stanlib Asset Management.
Scroll down to listen to the interview.
Back in 1994 it was R5 to the pound!— Kevin Lings
We’re not alone; if that’s any comfort. Many countries are doing far worse; Brazil is one example.— Kevin Lings
We’re holding up better than some of our emerging market peers. Brazil is in recession. They have a worse fiscal position that we have. Russia is in a very deep recession. Turkey is also very vulnerable as is Indonesia.— Kevin Lings
The rand is especially undervalued right now. When commodity prices rebound the rand should strengthen.— Kevin Lings
Part of this is the fact that the US will soon start hiking interest rates.— Kevin Lings
We’re not doing enough to capitalise on a weaker exchange rate.— Kevin Lings
Hiking interest rates may stop further weakening of the rand.— Kevin Lings