The rand has hit even lower levels against the US dollar – levels last seen 14 years ago. It was at R12,45 against the US dollar on Friday afternoon.
The weakening rand is causing serious problems for importers of goods as they are buying their merchandise at a more expensive rate.
Analysts say the strengthening dollar is not only hurting South Africa, but all other countries not using the US dollar as a currency.
Ricus Reeders from financial services company PSG Konsult says, “Every importer in every country is going to suffer; every exporter might possibly gain. So it’s not as if we are now all of a sudden at a competitive disadvantage as measured against other countries. It’s just that if you are not American, your imports have just become more expensive.”
The weakening rand raises the spectre of higher inflation and a possible interest rate hike