N THE AFTERMATH OF LAST MONTH’S EVENTS BOTH THE RAND AND THE STOCK MARKET HAVE HELD UP REMARKABLY WELL. THE RAND ENDED THE MONTH AT R 13.37 AGAINST THE US DOLLAR, AND THE JSE ALL SHARE INDEX WAS UP 3.6% FOR THE MONTH.
Notwithstanding this positive performance, over the long term the downgrade is negative for the economy, our companies and our people. In discussions with clients, the question uppermost on people’s minds is why the Rand remains so strong? One view, is that the downgrade has been priced into our currency for some time, and so no adjustment has happened now that the actual event has taken place. However the performance of the Rand is also impacted by global money flows, so there are always other factors at play too.