🔒 Who to blame for the rand slump?

By Felicity Duncan

The rand fell out of bed on Tuesday as Stats SA announced that the country is in a technical recession. There’s no way to sugar coat the numbers – GDP has contracted for two successive quarters and the rand is trading well below R15 to the greenback.

Understandably, people are looking for villains and finding plenty in government. But, while there is absolutely no doubt that economic mismanagement and corruption have savaged South Africa’s productive capacity, it is also true that this is a bad time for emerging markets in general. Turkey, India, and Argentina have all been walloped with currency slumps and countries ranging from Mexico to Indonesia have started raising interest rates to defend their currencies against a rampant dollar. The falling rand is partly the fault of the country’s leadership, but the blame can just as much be laid at the feet of global traders, who are beating down emerging market currencies around the world. In other words, South Africa picked a bad time for a downturn.

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