- South Africa is the continent’s second largest economy that suffered heavily during the 2013 emerging market crisis. Whereas many of its counterparts have improved since then, it seems the South Africa has failed to do so far. Similar fate is for the Rand (ZAR) which continues to depreciate against the dollar, currently trading at 11.625 against the dollar.
- It reported record trade deficit for January of Rand 24.2 billion, an all-time record.
- Economic growth slowed to a five-year low of 1.5 per cent in 2014 as the government continues to suffer over mining strikes and poor infrastructure and wide political corruption.
- Lower oil price has so far not helped the country to cover the deficit.
Rand is expected to under perform against the dollar which is already depreciated near 90 percent since 2011. Even better trade could be shorting the pair against INR which has pursued reforms so far and improved its outlook.
The material has been provided by InstaForex Company – www.instaforex.com