Why the South African Rand is Taking a Beating

South African Rand is taking a beating

Why the South African Rand is Taking a Beating

Over the past few months, South Africa has faced a variety of financial hiccups and merits. The rand grew in strength due to its commodities, but inevitably fell from grace. The rand started to cripple around 2 weeks into the month of April, where a staggering 4% drop was recorded. Despite all the ups and downs, the South African rand is taking a beating right now. Let’s discuss this in further detail.

The month of May has brought about an unfortunate but predictable result, the rand rising as high R16.15 to the dollar. This is the weakest our currency has been in over 6 months. Now, as we all know that the rand is on an ever-struggling journey to reach a point of stability. However, there are many contributing factors that are currently keeping our currency in the volatile place it currently finds itself.

South Africa has been dealing with loadshedding for nearly twenty years now. As much as we joke and complain about this ongoing hindrance, this affair has been a major threat to South Africa’s own economy. Once the power goes out, it prohibits the productivity of most industries that keep South Africa’s economy going. Stage 4 loadshedding hinders many industries that rely on electricity, leading to our economy growing weaker with no definitive end in sight.

The freak and sudden floods that struck the province of Kwa-Zulu Natal, over April, has lead to severe damages to infrastructure and the loss of lives. Over 300 deaths have been reported, with many livelihoods destroyed and major uncertainty towards relief schemes. Despite the tragedy that plagues each and everyone affected by the destruction; the economy has been further strained due to ongoing reparations and future relief that needs to be provided to the province.

The continued strengthening of the US Dollar has also lead to the gradual decline in the rand value. While the United States has managed to bounce back and build up its economy following the Covid-19 lockdowns, South Africa has not been so fortunate. Despite the ever-decline and rise of the rand, all we can do is adapt to the shaky exchange rates and hold out for it to stabilize.

The best way to adapt to this new and pricy economy would be the act of setting out a suitable budget. At Debtco Group, our qualified debt counsellors will ensure that your budget is in place and optimal when it comes to taking your payments into consideration. When paying off your debt, it is vital to remain consistent with your payments. Despite the crunch the economy has put on many consumers, it is always better to keep up to date with payments than fall behind.

If you are uncertain as to how you can settle your debt in times as uncertain as these, our services can help you manage your finances while still managing to pay off your debt. In order to overcome debt in a timely manner, it is best to enlist the help of a trusted debt company. We strive to help any consumer who is struggling with debt. We know how debt can affect the average person, as well as what works to alleviate the stress.

If you are curious as to how the South African rand and its weak state can impact your financial wellbeing, contact us.

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