This also includes intervention in the forex markets when necessary. Modeled on the Bank of England (BoE), the South African Reserve Bank (SARB) stands as the monetary authority for South Africa and issues its currency. Taking on major responsibilities similar to those of other central banks, the SARB is also known as a creditor in certain situations, a clearing bank, and a major custodian of gold. Krugerrands are gold coins that were minted by the Republic of South Africa in 1967 to help promote South African gold to international markets and to make it possible for individuals to own gold.
This will help us get a better understanding of the potential risk involved. So if you’re looking for an investment opportunity that offers both growth potential and diversification benefits, the rand is worth considering. Adding exposure to the currency can reduce your overall risk while potentially earning healthy returns.
- Our currency rankings show that the most popular US Dollar exchange rate is the USD to USD rate.
- In fact, it will allow you to trade smaller values per pip in most cases.
- Through the RMA agreement, the South African rand remained legal tender in all member nations and circulated alongside the national money of the member nations.
- Finally, the South African central bank has a good track record of managing inflation.
- Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance.
- It can be used for almost any currency exchange conversion under the sun.
The currency softened somewhat in 2005, and was trading around R6.35 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 under R6 to the dollar again. However, during the second and third quarters of 2006 (i.e. April through September), the rand weakened significantly.
Its banknotes have portraits of historical figures on the obverse with views of South African landscapes or landmarks on the reverse. The Bank of England printed early banknotes on behalf of the South African Reserve Bank. The South African rand was first produced in 1961, when South Africa became a republic. It replaced the South African pound, which used to be the legal currency of the Union of South Africa since it was established as a British Dominion in 1910. South African Rand refers to the legal currency of the Republic of South Africa. It is also recognized as a legal currency in the Common Monetary Area that it shares with Lesotho, Namibia, and Eswatini, although each country in the monetary union also uses its own currency.
The History of the South African Rand
By 2014, it was trading at a rate of slightly more than 15 ZAR/1 USD. The South African rand (ZAR) is the currency of South Africa and is issued by the South African Reserve Bank. The name is derived from the word ‘Witwatersrand’, which means ‘ridge of white waters’. The ridge is where most of South Africa’s gold deposits were found and where Johannesburg was built.
South African ZAR coins all bear the same obverse of the state coat of arms with a sprig of Rand behind it. Take your learning and productivity to the next best macd settings for day trading level with our Premium Templates. Access data dating back to 1990 for over 38,000 FX pairs, with charting capabilities and each exporting options.
Account Currency – USD vs ZAR vs GBP
In recent years, the ZAR has been one of the most volatile currencies, and its value has been highly affected by political and economic events in South Africa. Recent years have seen the Rand’s value influenced by concerns about South Africa’s political and economic stability. ZAR has been officially used since its establishment in 1961 and is subdivided into 100 cents, replacing the complex system of pounds, shillings, and pence.
The resulting number will show you the amount of rands that you have to spend on your trip. The other option is to do the calculation manually using a simple mathematical formula. However, in order to do this, you need to know the current exchange rate. Above all else, the central bank is in charge of the achievement and maintenance of price stability.
What is South African Rand (ZAR)?
The U.S. dollar is the currency most used in international transactions. Several countries use the U.S. dollar as their official currency, and many others allow it to be used in a de facto capacity. Calculating a conversion from dollars to rand is fairly simple. Our currency rankings show that the most popular US Dollar exchange rate is the USD to USD rate. Gold is the country’s most exported good, representing 15% of total exports in 2019 or $16.8 billion. The September 11 attacks in 2001 created global uncertainty, and the rand took a steep dive, falling to R13 per U.S. dollar (USD).
This means there is potential for appreciation in the rand’s value, especially if South Africa’s economic fundamentals improve. It has been a freely floating currency since 1995, and market forces determine its value. One is the possibility of further rating downgrades, which could spook investors and lead to capital outflows. Some experts believe the currency could strengthen in the coming years due to South Africa’s improving economic prospects. On 14 February 2011, the ZAR traded at R6.90 to the dollar, its weakest point since 2009.
Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses.
British Pound to South African Rand stats
During the late 17th century, the Rixdollar was used and was the first South African currency to include paper notes. During British occupation, in 1826, the Cape Colony was put on a sterling basis, though other currencies, including Spanish Dollars, US Dollars, French Francs, and Indian Rupees continued to circulate. In 1921, the Reserve Bank of South Africa was established as the central bank. In 1961, the South African Rand replaced the Pound under a decimalized system. Check live rates, send money securely, set rate alerts, receive notifications and more.
We have partnered with Wise so you can send money abroad for less. An easy-to-use and reliable international money transfer solution for businesses. Three countries that peg their currency with the rand are Eswatini, Lesotho, and Namibia. During the global coronavirus pandemic, the rand weakened to more than R17 per USD and, as of August 2021, settled to approximately R15 per USD. As clearly indicated, ZAR based accounts offer a significantly lower risk per pip when compared to the USD or GBP alternatives. You might get a shock but it is normal to see these major difference in spread.
Coins were introduced in 1961 in denominations of 1⁄2, 1, 2+1⁄2, 5, 10, 20, and 50 cents. The 1 rand coin for circulation was introduced in 1967, followed by 2 rand coins in 1989 and 5 rand coins in 1994. This post has everything you need to know about converting dollars to rand, including where to secure the best exchange rates and how to avoid paying high fees on your conversion.
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 were printed in English, while two other official languages were printed on the reverse, thus making use of all 11 official languages of South Africa. In sterling terms, it fell from around 9.5% to just over 7%, losing some 25% of its international trade-weighted value https://bigbostrade.com/ in just six months. In late 2007, the rand rallied modestly to just over 8%, only to experience a precipitous slide during the first quarter of 2008. The controversial land reform programme that was initiated in Zimbabwe, followed by the September 11, 2001 attacks, propelled it to its weakest historical level of R13.84 to the dollar in December 2001. Keep in mind that exchanging currency often comes with added fees that a conversion calculator won’t be able to predict.