South African Currency to See New Heights?

South African currency to see new heights?By Tamas S. Kiss(London/Johannesburg) –14Nov2009The Republic of South Africa’s currency, the Rand (pronounced ‘rahnd’ and internationally abbreviated as ZAR), is perhaps the most commonly used currency in Southern Africa and is expected to see new heights. Legal and illegal residents in this region of sub-Saharan Africa prefer to exchange their goods in ZAR in countries including Lesotho, Namibia, Swaziland and even Zimbabwe - it being perhaps the most stable currency in Southern Africa. ”The Rand has become the unofficial common currency of the region,” one South African experts said, citing reasons of ongoing regional political turmoil and instability of plummeting neighbouring economies. Our expert remembers back to November 1982 when he was able to legally obtain USD 1,000 in exchange for some ZAR 800, while on the contrary he would now have to (in November 2009) pay some ZAR 7,500 in exchange for USD 1,000.  ”While corruption, political instability and other issues in South Africa are not as bad here as in some neighbouring countries, the Rand has seen some heavy depreciation against other major foreign currencies, including the now ailing US Dollar,” he said. The Rand was so weak at one time (in 2008) that it cost in fact nearly ZAR 12 to exchange for USD 1. He put the blame on low international trade, the international banking crisis and global economic crunch.Nevertheless, with a clout of ZAR 7 versus USD 1, he says he is hopeful and expects the South African paper buck to spring to new heights and gain even more strength in 2010 due to the international hype of the FIFA Football World Cup, being staged in his homeland that same year. ”The Rand is expected to gain new record highs, just because of the World Cup,” he noted, adding that his country would most certainly prosper from huge sums obtained from broadcasting licenses, tourism and football memorabilia. He went as far as to say, “It’s impossible to predict, but our Rand could easily strengthen even to as much as ZAR 4 vs USD 1, during the time of the World Cup.” But what of a possible sharp downward turn, following the World Cup, as South Africa infamously still has one of the highest crime rates in the world, perhaps even poll positioning itself before the prestigious football event it so much expects to turn the odds, now against it. ”We are aware of our problems, but the government is doing its best to handle the dire situation in a very professional and civilized manner, also calling for and involving international crime busters to help combat any possible malicious acts against the flood of tourists and football fans swarming to the tip of Africa next year,” he said. The expert did not rule out the government’s possible collaboration with top crime leaders, in exchange for enhancing and producing lower and more ‘favourable crime statistics’ in return for ‘other favours’ such leaders could be allowed to enjoy in the southernmost part of the continent, where it is also said that one in four Africans are carriers of the deadly HIV virus, causing the regional AIDS pandemic. Nevertheless our expert believes that international trade will again boom in 2010, thanks to the growing demand for minerals and other commodities of which this African nation is famous for exporting worldwide.  ”South Africa is so rich in commodities that even our sky-scrapers were built with sand, containing gold,” he reveals, explaining that once sand from gold-mining dumps were used to build the city of Johannesburg, this same sand is now being “re-exploited” to win a further 15% of gold from it via the latest technologies. ”Other than gold, we are also rich in platinum and diamonds,” he added, suggesting that the low cost for workforce and high profit margins continue to make South Africa one of the most potential global investment destinations. He waved suggestions and concerns that South Africans could perhaps see its economy slump again when the lights go out after the World Cup, arguing that fresh capital in the form of currency and investments, now being pumped into the country, should be turned towards major developments and improving social trends, like housing. ”Maybe if the South African Government can pay its police force and law enforcement agencies a higher than average salary, there will be finally be less corruption at the top and the crime will be ridden from the streets as well,” our expert suggested, adding that if South Africa is able to bank in its chips on the football, it can expect to see an all-new golden age in the new decade.