The relationship between two parties is based upon a long history between them. Each event leaves a long-standing impact on those relations. This becomes even more relevant in the case of trade and economic ties between two parties and, in this case, two countries. The United States and South Africa are two major countries, as well as economic powers in their respective regions. Both nations have a centuries-old history of cooperation and economic ties.
There was once a time after 2000 when some economists feared that Rand would crumble even more than it already had. Still, as the South Africa nation, it’s currency also showed resilience once again and prevailed against the Dollar.
South Africa enjoys a robust trade relationship with the United States, mainly due to its strategic and geographic advantages. As of now, the biggest trade partner of the US in Africa is South Africa. More than 600 American firms are operating within the country as of 2020.
The US contributes more than $7 billion in Foreign Direct Investment to South Africa. Similarly, South Africa also contributes $4 Billion as a direct investment in the US. This makes South Africa the net beneficiary of direct mutual investment. Bilateral trade between both countries has reached USD $18 billion, with South Africa having a surplus of USD 2.1 Billion.
Overall, South Africa remained a beneficiary of the bilateral trade relationship between the US and SA. Some analysts say that the progress of South Africa was actually due to their relationship with the United States that helped South Africa’s relationships with other nations also.
What A Us Dollar Is And Where It Is Used
The US dollar is the Elixir of economic life for any entity, big or small, involved in a trade or economic operations in the world since the last century. The United States of America got hold of the world economy after World War II when the Bretton Woods system of the US Dollar as the base company for all the trades was put into operation.
This provided the USD with prime importance in any international economic activity. Since then, the US dollar is used to pay international trade regardless of country or the commodity being traded. If you want to engage in trade with other countries, which you must need to do in order to survive in the current world order, you need to have possession of dollars. History Of importance US Dollar, as stated previously, is mainly related to the Bretton Woods System, where reserves of gold-backed the US dollar, and the US dollar-backed the other currencies.
However, under the Reagan administration, the gold standard was ditched, and the USD took over gold as fiat currency. Since then, Dollar has become the most important thing in the world.
Although most individuals and companies keep their funds in banks and transact online without taking possession of all their money, the central banks hold the money in their reserves for obvious reasons.
The Dollar is held in its current official denominations. After 1969, the larger than 100 denominations of dollars were discontinued, and only seven denominations were left in circulation.
Current US dollar denominations are $100, $50, $20, $10, $5, $2, and $1. The most common denomination used for international trade is $100. Along with denominations, the abbreviations of the US dollar need to be known in order not to miss something related to currency. The most common abbreviations used for dollars other than official tern ‘USD’ are ‘$’ symbol and ‘dol.’ dol is sometimes accompanied by ‘s’ to become dols. USD is also known as greenback in market terminologies.
Valuations Of The Us Dollar
Like any other currency, the Dollar’s value is also determined by the market forces. Although the Dollar has gained a central position in international trade, it doesn’t mean that its value will not be affected by market factors.
The three important variables usually determine the value of a currency, the demand for goods and services, the available supply of goods and services, and the amount of currency being printed by the central bank.
The first two factors cause a rise in cost while printing money results in the devaluation of the currency. Dollar valuation is determined by an index called Consumer Price Index, aka CPI.
Origin of The Dollar Sign
There are several stories and hypotheses about the origin of dollar sign $ or double strokes. The most prominent source led us to believe that the dollar sign was derived from the Spanish-peso symbol of PS. When P and S plugged together, the curve of P disappeared, eventually leaving behind S with a vertical line. The two lines dollar sign was derived from letters U and S plugged together, leaving out the curve of U on top of S.
The Rand and Where It Is Used
Like any other currency in the world, South African Rand also represents its country. The Rand is the official currency and legal tender within South Africa, along with Eswatini, Namibia, and Lesotho. The official code for South African currency is ZAR (originated from Dutch language term Zuid-Afrikaanse Rand). The origin of the word Rand has some sentimental value. The word Rand was derived from Witwatersrand, which translates into “white waters’ ridge.” Rand is the Dutch word for ‘Ridge.’ Johannesburg was built upon Witwatersrand, and most gold deposits of South Africa were found here.
The history of the South African Rand as an official currency started when it was introduced back in 1961 in then known as the Union of South Africa. Rand has denominations of 10 rand, 20 rand, 50 rand, 100 rand, and 200 rand.
Since its inception, South Africa has issued and launched seven series of currency notes. They started with a picture of Jan van Riebeeck on series one, two, and three, followed with images of different animals like rhinoceros, elephants, lions, cape buffalos, and leopards for the fourth and fifth series. After the end of Apartheid, the pictures of Nelson Mandela were printed on notes for the sixth and current seventh series.
The Abbreviation for Rand is R, and its official name ZAR is abbreviated from Zuid-Afrikaanse Rand. Rand is based upon a flexible exchange regime, meaning that the valuation of Rand is determined by market forces. Valuation of currency is affected by market forces like demand and supply of goods and services within the country and reserves held by foreign countries. Some additional factors influencing the currency value include political instability, which eventually creates a demand and supply gap, and the current account deficit is triggered by more spending on trade than income. At the time of its inception, one Rand was worth 1.4 USD, which later continuously devalued over time, which takes it to a current value of 15.62 R for $1.
You can follow Live USD to ZAR rate today here:
South African Rand exchange rates to major international currencies:
|South African Rand||1.00 ZAR|
ou can calculate your desired currency to Rand with the help of the above table and currency converter.
Brief Exchange Rate History of Rand/USD
Like all the currencies in the world, Rand has seen many ups and downs along the line. USD to Rand history is mostly Dollar gaining value against ZAR. Rand was introduced three months prior to the declaration of South Africa as a Republic in 1961. At inception, Rand war trades $1.4, and it continued to do so till 1971. In 1982, the US dollar became stronger than Rand for the first time when Rand was traded 87 cents to USD.
However, the restriction on South Africa due to Apartheid caused the currency to devalue, and till 1984, it was continued to trade between R1 to R 1.3 against USD 1. By the end of 1985, the exchange rate between USD/ZAR became R2 per US dollar. The South African administration alarmed by this and suspended all foreign exchange for three years to stop further depreciation of the currency.
The currency traded at the rate of R 2 per Dollar between 1986-88 but reached R 2.5 by the end of 1989. In the 1990s, South Africa took a major shift in its path as the Apartheid ended, and the black majority administration took to change. However, this led to political uncertainty, and currency kept constantly devaluing over the decade and reached 3.6 at some point.
The period of President Thabo Mbeki was proven to be the worst for Rand as, during that time, the Rand devalued most, and it never again recovered from that carnage. Mbeki’s tussle with the US administration and policies impacted the Rand negatively and combined with the September 11 attacks; it caused Rand to devalue to R 13.84 against the Dollar by Dec 2001.
There was once a time after 2000 when some economists feared that Rand would crumble even more than it already had, but as the South African nation, it’s currency also showed resilience once again and prevailed against the Dollar.
The dramatic recovery, backed by formal investigation of devaluation, brought Dollar back to R 9 in 2002, and it continuously kept gaining over subsequent years. From 2004 to 2006, Rand fluctuated between R 5.7 to R 6.4. In the last decade, policies of President Zuma combined with weakening the mining industry, cut in stimulus spending, caused Rand to drop to R 17.9 at one point.
Since then, Rand is constantly rebounding and reached R 14 in 2017. Currently, Rand is trading at a rate of R 15.6 against %1
The exchange rates change daily and instantaneously; however, historical rates are also a good indicator of the future currency projection if analyzed by keeping all the related factors in mind. Here is the historical USD to ZAR rates for the last three months, along with all days of last week.
|Nov 11, 2020||15.6298||0.03%|
|Nov 10, 2020||15.6250||1.71%|
|Nov 09, 2020||15.3625||-1.42%|
|Nov 08, 2020||15.6298||0.30%|
|Nov 06, 2020||15.5832||-0.61%|
|Nov 05, 2020||15.6793||-1.22%|
|Nov 04, 2020||15.8730||-1.15%|
|Nov 03, 2020||16.0583||-0.94%|
|Nov 02, 2020||16.2106||-0.20%|
|Nov 01, 2020||15.5832||-4.07%|
|Oct 25, 2020||16.2438||0.35%|
|Oct 18, 2020||16.1871||-2.19%|
|Oct 11, 2020||16.5491||0.56%|
|Oct 04, 2020||16.4573||-0.51%|
|Sep 27, 2020||16.5424||-3.37%|
|Sep 20, 2020||17.1186||4.92%|
|Sep 13, 2020||16.3163||-2.50%|
|Sep 06, 2020||16.7350||0.77%|
|Aug 30, 2020||16.6068||0.15%|
|Aug 23, 2020||16.5827||-3.28%|
|Aug 16, 2020||17.1452||-1.32%|
|Aug 09, 2020||17.3749||-1.46%|
FAQ’s around Dollar to Rand
Where can I buy USD?
US dollars can be exchanged with Rand from any authorized currency exchange dealers. Usually, people use banks to buy a foreign currency, which is the most convenient way.
What is the current exchange rate of the US Dollar vs. South African Rand?
As we said earlier, the exchange rate of a currency is changed with every second. To know the current exchange rate of USD/ZAR, you can check here.
Will the US Dollar Strengthen against the South African Rand?
Although the US dollar has climbed against Rand since the inception of Rand in 1961, the Dollar, however, lost its value against African currency for short periods from time to time. You can analyze the future projection of currency by counting in all the relevant factors. The USD itself is weakening globally, and Rand may also have its day against the greenback in the near future, but we can’t say anything for sure.
Should I invest in US Dollars?
The US dollar is internationally accepted legal tender, and you can do a lot of things with it if you have some in your pocket. All international trading organizations accept USD as a transacting currency. You can also benefit from the exchange rate difference in the future of the Dollar gains value against Rand.
Is the exchange rate for all currencies same as USD?
No, the exchange rate for every currency pair differs from others. There are many factors involved in the exchange rates of a pair ranging from demand and supply factors to printing of currency as well as reserves held by central banks for corresponding currency.
What is Rand pegged to?
Rand has been pegged to the US Dollar since its inception.
Is Rand a legal currency of Africa?
Africa is a subcontinent, and South Africa is just a country in it, just like the United States of America is a country in the American subcontinent. Rand is the currency of South Africa, but it is also legal tender in some other African nations such as Lesotho, Namibia, and Eswatini.
When do I need USD of Rand?
If you are a South African and plan to visit the USA, you need to buy USD and vice versa. If you want to try your luck in foreign trading exchange, aka Forex, then you will need to buy Dollars or Rand.