Rand hits five-year low

The rand dropped to a five-year low against the dollar on Monday 27 January, reaching R11,25 before climbing back about two cents by the afternoon.

According to The Citizen, since May last year the rand has fallen by 25 per cent. The weak rand poses a risk to inflation, since South Africa imports a large portion of its goods. The Reserve Bank will meet later this week and its agenda will focus mainly on unemployment and consumer inflation.

South Africa recently has been named one of the ‘fragile five’ – emerging economies that are struggling under a large current account deficit – which only will worsen if the rand falls further.

As of Tuesday 28 January 7am, the rand had recovered to R11 to the dollar.