Rand Drops as Central Bank & Importers Buy Dollars

The South African rand weakened today as the rand’s gains encouraged the central bank and the importers to take advantage of the stronger currency and buy the US dollars.

The rand’s rally may hurt the country’s exports but the central bank has limited resources to curb the currency’s gains. Gill Marcus, the central bank’s governor, said that there is no “easy solution” and the measures to trim the advance of the rand can be “hugely costly”. The currency surged previously as the US Federal Reserve signaled that it’ll keep the interest rates low for extended period of time, increasing the demand for the higher-yielding currencies.

USD/ZAR went up from 7.036 to 7.064 today as of 10:36 GMT after it previously slumped to 6.996.

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