The Rand dropped below R25 to the GBP yesterday for the first time ever and is well on the way to R26. This would equate to a 10% drop within 3 days which has never happened this quickly before.
I pay close attention especially to the GBP Rand conversion rates as I have kept GBP in the UK ad never bought it back to South Africa. When a currency is depreciating you leave it well alone because you are only guaranteed to lose.
Back in 2004 1 GBP was worth R10 and 21 years later the Rand has lost 150% which is an average of 7% per year so it has been gradual. This latest 10% drop in a few days is a major blow and it could speed up.
sourceI still remember the days when R20 was considered a lot and there was no R100 or R200 note in existence. 20 buys you nothing today and is like having loose change.
In my head I have already written off my two properties here as far as value goes because outside of SA as a combined value you could not buy another property. When I eventually relocate they may pay for a car, but I don't expect much more. This is the scary realty of living with a currency on the slide as property is not an investment.
Crypto is a bigger life line than ever after the devaluation this week ad it will be interesting to see when R30 to 1 GBP will be breached and it could be within a few weeks or a few months, but definitely before Christmas. Economically this is terrible timing for SA with the latest increase in tariffs as the USA being SA's 2nd biggest trading partner does not paint a pretty picture.
The agricultural sector and automotive sector are in the cross hairs which represent close to 1.5 million jobs. Any investors should be heading for the hills as the SA Government is not only useless, but also clueless. Hand outs from the EU and US on a regular bass means they never were under big pressure and even when they made poor decisions there were no major repercussions. Things are very different now and the next steps will tell us which way the Rand is heading and we know which way that is.
There is nowhere to hide when your currency loses 10% that quickly especially when you are more of an importing country so we know items will sky rocket in price. SA does not have an oil refinery and imports it's diesel and petrol as a final product. The people have complained about inflation and we are about to experience real inflation for the very first time. Prices will be up anywhere between 15 and 25% this time next month due to the 100% fully imported fuel. This will impact not only the poor, but the middle class and especially businesses. The proverbial is about to hit the fan and there is nothing that can stop this.