I have been asked this question a lot over the last few days, what is happening with the Rand, why is it getting so weak, what is the problem here with us? Why is it weakening like that? Well, the short answer is that it is not just us, it is everyone, because we pulled up a few charts of the Indian Rupee and the Brazilian Real and compared them to the US Dollar and overlayed the graph of the ZAR to the USD. And you know what, in the short term, over the last few weeks the graph is identical. Most emerging market currencies have been smashed against the majors, which is strange, because they have their problems, serious problems. A flight back home, that is what it is.
I was relieved to see Beyond Brics, the FT blog people who had written exactly what we were exploring yesterday, the day before, the day before that and so on, over the last few weeks. Check: EM currencies: here we fall again. See, often it has nothing to do with you, or me. And rather everyone in between, the Forex market sloshes around with around 4 trillion Dollars worth of daily trade, that is around ten years of our economic output. So, don't get anxious about the Rand, just tighten your seatbelt.