It is common knowledge that the performance of a currency might depend in part on events happening in the issuing country. With political stability and certainty, a currency might perform well and perform badly without those.
What is playing out in South Africa right now only amplifies this reality, with the country’s rand seemingly struggling against a couple of other currencies, including the American dollar, with the uncertainty of President Cyril Ramphosa’s cabinet announcement.
As it stands, the president is yet to announce his cabinet and a fever of anticipation is already building up over that, The ruling African National Congress (ANC) failed to pull off a clear-cut victory and has to for, a Government of National Unity (GNU) with other “fringe” parties.
The seeming wave of uncertainty has seen the South African rand (ZAR) exchange at around R18.27 to $1 – a palpable weakness compared to earlier exchange rates.
This isn’t the first time when the ZAR has weakened against the dollar, however. It’s happened in the past and may still happen in the future, as the currency responds to the situation on the ground.
That said it will be interesting to see if the rans will show strength with the final announcement of President Ramaphosa’s cabinet.
