The dollar is tanking against all major currencies except the SA Rand. I believe the dollar has strengthened against it by almost 20% over the last eight months. I am not complaining, but why? What do the South Africans have to say?


You can borrow money, but you can't borrow time. Go now.

corecpa,

Mostly we cry! I do not consider the $ is gaining strength against the Rand _ I think it is more the Rand loosing against all currencies!

Some HO's are of course laughing all the way to the bank with 20 % more prifit they have expected. Some HO's, like Infinito and myself, are passing the change in exchange rate on to the Americans.

Where will then rot on the Rand stop? Well, a few years back we exchanged Rands for US$ at 16:1 - so the current 8:1 is just about 1/2 way to where it has been!

In good hunting.

Andrew McLaren

Ok, buy why? Is inflatiion rising in SA? The spill over from Zimbabwe? That "Bring Me My Machine Gun" presidential candinate?

So, in passing on the exchange rate, you are offering Americans cheaper hunts? I haven't seen that from anyone else at this time.

well considering all the things causing economic conditions today, my guess is stronger paper

Look at who's sweating on who's checkbook.

The US dollar is also gaining strength against the Namibian dollar. It must be an African thing.

Frank,

The Namibian Dollar is tied to the SA Rand.

quote:

Originally posted by Use Enough Gun:
So, in passing on the exchange rate, you are offering Americans cheaper hunts? I haven't seen that from anyone else at this time.

It was 12:1 a few years back and you did not see a lot of discount prices. That was when it seemed everyone in RSA with a truck and a jack russel became a PH.

I remember those days. And then the prices went up and up. Now that the rand is tanking, why don't the prices readjust? (i.e. getting more for your hunting buck?)

'Weaker rand not all bad'

Mar 17 2008 9:18PM

Cape Town - Current global economic turmoil is unlikely to "impoverish" South Africa and there is some good in the weaker rand, according to First National Bank chief economist Cees Bruggemans.

Commenting on the falling rand on Monday, Bruggemans said the good news was that it was the shock absorber of the moment, shielding the economy from the fallout from the global credit and banking contagion.

"It remains to be seen, however, whether there will be back-to-back bad news if the SA Reserve Bank (SARB) were to raise interest rates to neutralise the effect of the weaker rand," he said.

Seven months into the United States "housing-cum-credit-cum-banking debacle," things were still worsening, drastically even.

The US dollar, now $1.58/Euro, was clearly on skids. In coming months, the dollar could be expected to explore $1.60 - $1.75/Euro territory.

The good news was that South Africa's two precious metals - gold and platinum - along with other rising commodity export prices, were effectively paying for rising oil import costs.

"Unlike other parts of the emerging and rich world which don't have such built-in hedges, we have natural protection shielding us," he said.

Facing more weakness

"At the same time, the world prefers to blithely ignore all of this, instead fixating on our large current account deficit of over 7% of GDP.

"With differentiation rigorously applied, separating good girls (attractive surpluses) from bad girls (big deficits), the tendency is to sell us off."

The result was a weaker rand at R8.20 against a dollar that was weakening itself at $1.58/Euro.

With this US-cum-global financial crisis feeding the anxiety, buying oil might remain popular until the crisis finally ended, Bruggemans said.

Meanwhile, the rand also apparently faced more weakness in tandem with the dollar's descent. Another 10%-20% loss would take it to R9-R10/dollar.

"If oil remains global-grease-of-last-resort for the high rollers, its rising price may prevent us from gaining an overall advantage from our rising precious metal prices.

"Only if our precious metals achieve a breakout relative to oil, would our current account deficit suddenly become positively transformed."

'Call of duty'

So far the rand was 20% weaker than in 2007. That weakness could still grow to 30%, if not 40%.

That would inject a lot more income than what was currently being lost due to slowing spending momentum.

"It argues in favour of higher interest rates later this year, in line with what happened in 2002.

"We are in the midst of a major disturbance that's moving our cheese.

"Happily it isn't impoverishing us as a country (oil is naturally hedged by precious metals and other exports), but the currency effects are rearranging the winner-loser line-up.

"The SARB may have to adjudicate that beauty competition, however unwilling it must be under present political circumstances. There's the call of duty for you."

quote:

Originally posted by Wendell Reich:
Frank,

The Namibian Dollar is tied to the SA Rand.

See? I was right! It is an Africa thing.

I can find information, it's just that my understanding an interpretation of it is often lacking.

Benefit rom the weaker rand.

Special

quote:

So, in passing on the exchange rate, you are offering Americans cheaper hunts? I haven't seen that from anyone else at this time.

It's an African thing- Don't worry, Zuma will take the rand to at least a Million to 1 against the USD , just so South Africans don't feel left out of the African "renaissance"

I would say for the most part safari costs, no matter what a particular currency is doing, continue to rise.

Safari prices in Zim have not dropped and are not about to. My RSA outfitters all raised their day rates and trophy fees for 2008. The cost of fuel continues to rise which also causes cost increases for just about everything else, food, services, etc.

Supply and demand may also have influence on safari pricing. Lots of baby boomers entering retirement with good pensions to spend right now and will for some years to come.

quote:

Originally posted by Ganyana:
It's an African thing- Don't worry, Zuma will take the rand to at least a Million to 1 against the USD , just so South Africans don't feel left out of the African "renaissance"

Is Zuma that bad Ganyana?

The funny thing is that they talk about Gold and Platinum being a natural hedge, when platinum has lost about 13% in the last week and the gold price hike is driven by the fact that they can't get enough out of the ground so they are working at reduced capacity.

The reality is that the currency is being sold internationally because of the perceived political/economic risks and the metals hedge is the exact opposite because of the lack of volume. Against the Dollar the general consensus is that it goes wider still...

Apparently Zuma is that bad indeed.

Rgds,
FB

"Black empowerment" programs tend to have a deleterious effect on African currencies.