Editor’s View: Rand
SOUTH Africa’s share price, the rand exchange rate, is expected to continue its journey to recovery. On January 21, 2016, the rand reached a low of R16.86 against the dollar.
Since then, against all odds, the rand has improved by more than 342 cents, or 20.8 percent.
The main reasons: downgrading avoided; improved exports; lower current account deficit; inflow of portfolio capital; improved prospects for economic growth and a credible budget.
This is nothing else than a vote of confidence in the ability of the South African economy to honour commitments towards the stabilisation of economic, fiscal and monetary policy.
The impact of these policies will affect a stronger rand exchange rate this year. The platform for a stronger economy and a stronger rand exchange rate is therefore set.
Global captains of industry, presidents of countries and chief executives of multibillion family-owned businesses (I was privileged to meet them with Dr Iqbal Survé, the chairman of the Sekunjalo Group) were highly impressed with the overall positive messages Dr Survé presented at Davos last week.
Deputy President Cyril Ramaphosa, ministers Jeff Radebe, Pravin Gordhan and Rob Davies, as well as Dr Survé and many other industry executives, conveyed a strong message: “South Africa is open for business.”
An interview with Reserve Bank Governor Lesetja Kganyago dealt with the role of the Reserve Bank “to protect the value of the exchange rate”. I would like to salute the Reserve Bank Governor for his ambassadorial contribution during WEF 2017.