The Full Wiki

South African rand: Wikis

Advertisements
  
  

Note: Many of our articles have direct quotes from sources you can cite, within the Wikipedia article! This article doesn't yet, but we're working on it! See more info or our list of citable articles.

Encyclopedia

From Wikipedia, the free encyclopedia

South African rand
Suid-Afrikaanse rand (Afrikaans)
New 5 rand (2004)
New 5 rand (2004)
ISO 4217 Code ZAR
Official user(s)  South Africa (Common Monetary Area member)
 Lesotho (Common Monetary Area member), alongside Lesotho loti
 Namibia, alongside Namibian dollar
Unofficial user(s)  Swaziland (Common Monetary Area member), alongside Swazi lilangeni
 Zimbabwe[1]
Inflation 8.4% (South Africa only)
Source South African Reserve Bank, April 2009
Method CPI
Pegged with Lesotho loti, Swazi lilangeni and Namibian dollar at par
Subunit
1/100 cent
Symbol R
cent c
Plural Rand
Coins 5c, 10c, 20c, 50c, R1, R2, R5
Banknotes R10, R20, R50, R100, R200
Central bank South African Reserve Bank
Website www.reservebank.co.za

The rand (sign: R; code: ZAR) is the currency of South Africa. It takes its name from the Witwatersrand (White-waters-ridge in English), the ridge upon which Johannesburg is built and where most of South Africa's gold deposits were found. The rand has the symbol "R" and is subdivided into 100 cents, symbol "c". The ISO 4217 code is ZAR, from Dutch Zuid-Afrikaanse rand. (South African Rand). This is echoed in South Africa's internet TLD name ".za" from the Dutch Zuid Afrika, meaning "South Africa". [2]

The rand is the currency of the Common Monetary Area between South Africa, Swaziland and Lesotho. Although Namibia withdrew itself from the Common Monetary Area, the rand is still a legal tender.

Contents

History

The rand was introduced on 14 February 1961. A Decimal Coinage Commission had been set up in 1956 to consider a move away from the denominations of pounds, shillings and pence, submitting its recommendation on 8 August 1958.[3] It replaced the South African pound as legal tender, at the rate of 2 rand = 1 pound or 10 shillings to the rand. This took place in the same year that the Republic of South Africa was established.

Advertisements

Brief exchange rate history

A rand was worth more than a U.S. dollar from the time of its inception in 1961 until 1982, when mounting political pressure combined with sanctions placed against the country because of apartheid started to erode its value. The currency broke above parity with the dollar for the first time in March 1982, and continued to trade between R 1–R 1.30 to the dollar until June 1984, when depreciation of the currency gained momentum. By February 1985, it was trading at over R 2 per dollar, and in July that year all foreign exchange trading was suspended for 3 days to try to stop the devaluation.

By the time that State President PW Botha made his notorious Rubicon speech on 15 August 1985, it had weakened to R 2.40 per dollar. The currency recovered somewhat between 1986–88, trading near the R 2 level most of the time and even breaking beneath it sporadically. The recovery was short-lived however, and by the end of 1989 the rand was trading at levels of more than R 2.50 per dollar.

As it became clear in the early 1990s that the country was destined for black majority rule and one reform after the other was announced, uncertainty about the future of the country hastened the depreciation until the level of R 3 to the dollar was breached in November 1992. A host of local and international events influenced the currency after that, most notably the 1994 democratic election which saw it weaken to over R 3.60 to the dollar, the election of Tito Mboweni as the new governor of the South African Reserve Bank, and the inauguration of President Thabo Mbeki in 1999 which saw it quickly slide to over R 6 to the dollar. The controversial land reform program that was kicked off in Zimbabwe, followed by the September 11, 2001 attacks, propelled it to its weakest historical level of R 13.84 to the dollar in December 2001.

Older notes and coins, mostly out of circulation now.

This sudden depreciation in 2001 led to a formal investigation, which in turn led to a dramatic recovery. By the end of 2002, the currency was trading at under R 9 to the dollar again, and by the end of 2004 was trading at under R 5.70 to the dollar. The currency softened somewhat in 2005, and was trading at around R 6.35 to the dollar at the end of the year. At the start of 2006 however, the currency resumed its rally, and, as of 19 January 2006, was trading at under R 6 to the dollar again. However, during the second and third quarters of 2006 (ie April through September), the Rand weakened significantly. In Sterling terms, it fell from around 9.5p to just over 7p, losing some 25% of its international trade-weighted value in just six months. Late in 2007, the Rand rallied modestly to just over 8p, only to experience a precipitous slide during the first quarter of 2008.

This downward slide could be attributed to a range of factors: South Africa's worsening current account deficit, which widened to a 36-year high of 7.3% of Gross Domestic Product (GDP) in 2007; inflation at a five-year high of just under 9%; escalating global risk aversion as investors' concerns over the spreading impact of the sub-prime crisis grew; and a general flight to "safe havens", away from the perceived risks of emerging markets. The Rand depreciation was exacerbated by the Eskom electricity crisis, which arose from the utility being unable to meet the country's rapidly growing energy demands. In particular, major mines were shut down, with Eskom warning that major new industrial projects could not be powered until additional power generation capacity could be brought on stream - something unlikely to be achieved for at least another 5 years. This would have a significant impact on production and exports by South Africa's mining industry, and would thus worsen an already worrisome current account deficit. It is particularly unfortunate that this should have happened at a time of record high prices for hard and soft commodities.

Coins

Coins were introduced in 1961 in denominations of ½, 1, 2½, 5, 10, 20, 50 cents. In 1965, 2-cent coins replaced the 2½-cent coins. The ½-cent coin was last struck for circulation in 1973. The 2-rand was introduced in 1989, followed by 5-rand coins in 1994. The 1- and 2-cent coins were discontinued in April 2002, primarily due to inflation having devalued them. All prices are now rounded to the nearest 5 cents.

In an effort to curb counterfeiting, a new R 5 coin was released in August 2004, as well as new banknotes in February 2005. Security features introduced on the coin include a bi-metal design (similar to the €1 and €2 coins, the Thai 10 Baht coin, the British £2 coin and the Canadian $2 coin), a specially-serrated security groove along the rim and micro-lettering. The new notes also feature a number of new security features.

Banknotes

The 2005 series.

The first series of rand banknotes was introduced in 1961 in denominations of 1, 2, 10 and 20 rand, with similar designs and colours to the preceding pound notes to ease the transition. They bore the image of Jan van Riebeeck, the first V.O.C. administrator of Cape Town. Like the last pound notes, they came in two variants, one with English written first and the other with Afrikaans written first. This practice was continued in the 1966 series which included the first 5 rand notes but did not include the 20 rand denomination.

The 1978 series began with denominations of 2, 5 and 10 rand, with 20 and 50 rand introduced in 1984. This series saw a major design change. In addition, the series has only one variant for each denomination of note. Afrikaans was the first language on the 2, 10 and 50 rand, while English was the first language on 5 and 20 rand. The notes bore the image of Jan van Riebeeck.

In the 1990s, the notes were redesigned with images of the Big Five wildlife species. With the 2 and 5 rand coins replacing notes, notes were introduced in 1994 for 100 and 200 rand.

The 2005 series has the same principal design, but with additional security features such as colour shifting ink on the 50 rand and higher and the EURion constellation. The obverses of all denominations are printed in English, while two other languages are printed on the reverses, making all eleven official languages of South Africa available.

Current ZAR exchange rates
From Google Finance: AUD CAD CHF EUR GBP HKD JPY USD
From Yahoo! Finance: AUD CAD CHF EUR GBP HKD JPY USD
From XE.com: AUD CAD CHF EUR GBP HKD JPY USD
From OANDA.com: AUD CAD CHF EUR GBP HKD JPY USD

See also

References

  1. ^ Alongside Zimbabwean dollar (suspended indefinitely from 12 April 2009), Euro, US dollar. Pound Sterling and Botswana pula. The US Dollar has been adopted as the official currency for all government transactions.
  2. ^ [1] The Free Dictionary
  3. ^ Mboweni, T.T. 2001. The Reserve Bank and the Rand: some historic reflections. Speech by the Governor of the Reserve Bank 29 Nov 2001. http//www.reservebank.co.za

External links

Preceded by:
South African pound
Reason: decimalization
Ratio: 2 rand = 1 South African pound = 1 British pound
Currency of South Africa
1961 –
Succeeded by:
Current
Currency of South West Africa
1961 – 1990
Note: administered by/occupied by South Africa since 1915
Currency of Namibia
1990 – 1993
Legal tender in Namibia
1993 –
Succeeded by:
Namibian dollar
Reason: withdrawal from Common Monetary Area
Ratio: at par
Note: dollar introduced in 1993, with South African rand remaining legal tender
Currency of Basutoland
1961 – 1966
Currency of Lesotho
1966 – 1980
Legal tender in Lesotho
1980 –
Succeeded by:
Lesotho loti
Note: loti introuced in 1980, with South African rand remaining legal tender
Currency of Swaziland
1961 – 1974
Legal tender in Swaziland
1974 – 1986
Circulates in Swaziland
1986 –
Succeeded by:
Swazi lilangeni
Note: lilangeni introduced in 1974. South African rand continues to circulate unofficially
Currency of Bechuanaland Protectorate
1961 – 1966
Currency of Botswana
1966 – 1976
Succeeded by:
Botswana pula
Reason: creation of independent currency
Ratio: at par

Simple English

The rand is the South African currency. 100 cents makes up one rand. The rand is named after an area near Johannesburg called the Rand, that is famous for its gold mines.

The symbol for the rand is a capital R, written before the sum. Thus, one hundred rands is written as R100.



Advertisements






Got something to say? Make a comment.
Your name
Your email address
Message