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what is up with the rand?


Witkop

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No-body can tell Funkman, taking them now just means you fix your cost and you know what to calculate your budget on. Waiting is a gamble, it may go either way.....are you a betting man?

 

Im not generally a betting man, but instinct tells me to wait a few days and hopefully it recovers. A few cents make a huge difference.

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true they dont expire... but banks are now charging a ridiculous fee for cashing them

 

No they dont expire, but you can end up with a redundant currency. For example I found a few thousand French Francs in travellers cheques in a travel bag of mine a year or so ago, I had obviously forgotten them there for years. When I enquired if I could exchange them for Euro's as I was going to France the bank told me they were redundant, and even though I had paid good money for the cheques years ago, the French Franc was no longer a valid currency and so I just lost them, no bank would exchange or pay them out.

 

Probably an extreme example and unlikely to happen with currencies like the US dollar or the Euro.

 

But cash can have the same issue, if you remember a few years ago the British Pound changed design, I still had some old British Pounds and no shop would take them, I had to go exchange them at a British bank and the woman told me there was an amnesty period as well of about two years, if you had not changed them in that time they were worthless.

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Im not generally a betting man, but instinct tells me to wait a few days and hopefully it recovers. A few cents make a huge difference.

 

Fair enough, I dont think it will recover as fast as it declined, but as I am off to the US in November as well, I am also hoping. :)

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Why is the rand in free fall or the last month? CRC has just become expensive....

 

CRC, Sheesh brother, if that is all you are worried about being expensive, try shopping for food.

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CRC, Sheesh brother, if that is all you are worried about being expensive, try shopping for food.

 

Indeed, and if the rand do's not recover expect some serious price increases in fuel which in turn effects everything from farmers tractors, to mining, to shipping, to aircraft cargo, to road transport to your driving to work and back.

 

Food is the first to increase in price from these causes as its the most used commodity so cost pressures are almost immediate.

 

SA needs a rand at R7.00 to the $1.00 or less to cushion our increasing costs, I just heard a mining CEO saying on Radio they are profiting from the increase in the gold price, but the devaluing rand means their input costs of machinery, and fuel is now escalating and eating into that profit. So yeah, a weak rand is not good for anyone.

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With the monetary policy (interest rates) remaining unchanged today, (which I think was a poor decision) I dont expect much change in the rand over the short term towards the upside (appreciation) a "hold" was pretty much factored into the market and the Rand still continued to be hammered.

 

It amazes me to listen to these officials at SARB talk to us like children, any school kid could tell you there are inflationary pressures due to the dramatic drop in the rand, we dont need them to confirm it......we need them to take action, but as usual they sit by while Rome burns.

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I think theres been blood letting for a while now, everyone knows it, its not news, the economy is stalled, we continue to shed jobs at an unprecedented rate, the rand is plummeting, there are heavy and serious inflationary pressures, a 50 basis point drop would not have shed any investors but would have injected liquidity into the market, but No, we will continue to fiddle while the boat sinks.

 

Tito was the of the last central bank officials worldwide to start cutting interest rates when the US markets crashed and we went into a recession which I do not believe we have recovered from. I see us heading that way again.

 

Funkman.......my suggestion, run and change your cash.

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CRC, Sheesh brother, if that is all you are worried about being expensive, try shopping for food.

 

If you don't buy at Woolworths, it's not that expensive.

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With the monetary policy (interest rates) remaining unchanged today, (which I think was a poor decision) I dont expect much change in the rand over the short term towards the upside (appreciation) a "hold" was pretty much factored into the market and the Rand still continued to be hammered.

 

It amazes me to listen to these officials at SARB talk to us like children, any school kid could tell you there are inflationary pressures due to the dramatic drop in the rand, we dont need them to confirm it......we need them to take action, but as usual they sit by while Rome burns.

As much as you might personally like an interest rate cut, I don't think you can question the Monetary Policy Committee's track record. South Africa has the second highest rating of the BRICS countries, and a rather impressive 4th place in financial market development. If anything, it's our labour practices that are hampering our economic growth (followed by lack of skills).

 

Anyway, the Reserve Bank's mandate is inflation control (which they are doing a great job with), not exchange rate control. We simply don't have the currency reserves to prop up our currency against the likes of the dollar. A weak rand is good for exports and tourism, our two key economic sectors.

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As much as you might personally like an interest rate cut, I don't think you can question the Monetary Policy Committee's track record. South Africa has the second highest rating of the BRICS countries, and a rather impressive 4th place in financial market development. If anything, it's our labour practices that are hampering our economic growth (followed by lack of skills).

 

Anyway, the Reserve Bank's mandate is inflation control (which they are doing a great job with), not exchange rate control. We simply don't have the currency reserves to prop up our currency against the likes of the dollar. A weak rand is good for exports and tourism, our two key economic sectors.

 

Oh I can, and I am not the only one. Our standing as good as it is means nothing to hard nosed international investors who are taking their money and running. Had we been the placebo of all good we would not be seeing a plummeting rand. A countries currency is its barometer of international investor confidence - ours is rock bottom, and the rand is the worst performing currency of all developing nations.

 

Yes, they are doing a good job of inflation control and yes we dont have sufficient funds to prop up the rand, however a weak currency is not good for anyone, most exporters have an import component in their product, their input costs like machinery and fuel rise with a devaluing rand, inflation gos on the uptick and that increases demands for higher wages, high prices reduce demand and that sheds jobs, fat German tourists may benefit, but explain to me how that helps the guy selling flowers on the street corner.?

 

I listened to a conversation last night on the radio with a mining CEO, he said mines have a huge input of imported equipment like trucks, machines etc, if the gold price remains constant, at around R11.00 to the $1.00 their input costs make it unprofitable to open mines.

 

Malema shouted his mouth off about a weak currency, well he got it......lets see the next economic report on jobs losses in our economy. Want to bet a few rand (as weak as it is) it wont be good.?

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Is this not just a cyclical phenomenon. Such as circa 04 and 07. I remember the days of 12 to dollar and more. Doesn't it all just correct itself to true values at some point?

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Maybe it'll do what it did end of 2008.

post-2030-0-26673600-1316696005.png

 

 

 

I hope it does that otherwise my plans for a new frame might suffer a setback.

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