Blog: 12 June 2018 (We take a look at the South African Rand and few other emerging market currencies performance against the Dollar)
In today's blog post we take a look at various currencies performance against the United States Dollar (USD) since the start of 2018. Sure the South African Rand is performing like a donkey in a horse race against the dollar, but its not as bad as some of its emerging market peers. We take a detailed look below.
Thanks to our good friends at PSG for supplying us with the currency data so that we are able to develop the graphic below.
The currencies we will look at are:
How bad is Rand really doing against the Dollar?
Well since the start of 2018, the Rand has lost 7.11% of its value against the US dollar. Basically South Africans will by 7.11% more per US Dollar now than what they would have paid for it at the start of 2018. While this is not good news, especially not for our local inflation numbers (as we import a large number of goods we consume (especially crude oil for fuel), our currency is still holding its value a lot better than some of our emerging market peers.
As the image below shows, that over the last month, the Rand has been the worst performing currency of the list of currencies mentioned earlier in the article. A large chunk of this is due to the very disappointing economic growth numbers published by Statistics South Africa last week, in which it showed the South African economy contracted by 2.2%.
As the image above shows, the Rand lost 6.95% of its value against the Dollar in the lat month. Yet for the year as a whole it has lost just over 7.1% of its value against the dollar. Basically all the damage has been done over the last month. It has to be noted that all the currencies we mentioned earlier lost ground against the US Dollar. The Chilean Peso performed the best of the bunch and only lost 1.16% of its value to the Dollar in the last month. the Turkish Lira was middle of the pack last month, with it losing 3.94% of its value against the dollar in the last month.However when looking at the numbers from the start of the year, the fortunes of the Turkish Lira and the South African Rand looks a lot different. The image below shows the performance of all the currencies in our list from the start of 2018.
As mentioned above the graphic the fortunes of the Turkish Lira and South African Rand are totally different when looking at the numbers from the start of the year, and not for the last month. While the South African Rand was the worst performing currency of the bunch over the last month, when looking at the numbers from the start of 2018, its the second best performing currency of the bunch. And while the Turkish Lira was middle of the pack over the last month, when looking at the numbers from the start of 2018, the Turkish Lira is by far the worst performing currency of the bunch. The summary below shows the percentage value lost(+)/gained (-) against the US Dollar from the start of 2018. The currencies are ranked from worst performing to best performing:
- Chilean Peso: 4.37%
- South African Rand: 7.11%
- Mexican Peso: 7.35%
- Brazilian Real: 14.93%
- Turkish Lira: 21.52%