Rand above Ten

 QE gives then takes away. Problems of 2008/09-Global economic decline still haunt currency markets. The Fed Reserve promised months ago: cheap money for Too Big Too Fail Banks was coming to an end. In response, financial investors with access to these funds are taking funds out of South Africa and other developing countries.

South Africa, India, Malaysia, Brazil plus Argentina (SIMBA) have taken the biggest equity market and currency declines. Only South Africa has resisted trying to resolve a situation that is in the hands of the market. Some emerging counties are frantically trying to stop currency decline, at no avail.

SIMBA countries have trade deficits. Currency decline should reduce imports and improve exports. Unfortunately; strike action in industry, inflation, uncertainty and increasing fuel import costs will negate the potential impact of devaluation. Rand is now trading above 10 to the dollar. For SIMBA countries, currency volatility will persist until the QE situation is remedied.