South African Rand

Overview

The South African Rand is the currency of South Africa, and is issued by the South African Reserve Bank. The currency takes its name from the Witwatersrand ("White-waters-ridge"), the ridge where most of South Africa's gold deposits were found and where Johannesburg was built. The Rand has the symbol "R" and is subdivided into 100 cents.

Coins are issued in 5c, 10c, 20c, 50c, R 1, R 2, and R 5 denominations. Banknotes include R 10, R 20, R 50, R 100, R 200 denominations.

The South African Rand is also legal tender in Swaziland and Lesotho, and is accepted in Namibia.

Economy

• Daunting economic problems remain from the apartheid era, including poverty, lack of economic empowerment for the disadvantaged, and inadequate public transportation. Unemployment is extremely high (approaching 25%), and South Africa ranks poorly for income inequality, as measured by the Gini coefficient.
• Growth has recovered in recent years, but unemployment remains high and outdated infrastructure constrains growth.
• A Commission established in 1956 recommended giving up the pound sterling and associated terms pounds, shillings and pence in favor of a new currency named "rand."
• From 1982, the value of the currency started to erode due to mounting international pressure and sanctions against the country because of its apartheid policies. In July 1985, all foreign exchange transactions were suspended for three days to try to stop the devaluation.
• The currency continued to depreciate due to the uncertainty of apartheid reforms and black majority rule. In 1992, the currency depreciated to the level of R 3 to the dollar; in 1999, to R 6 to the dollar. The September 11, 2001 attacks pushed the currency to its weakest historical level of R 13.84 to the dollar in December 2001. The currency has since stabilized.

History

• A Commission established in 1956 recommended giving up the British Pound and associated terms pounds, shillings and pence in favor of a new currency named “Rand.”
• The South African Rand was introduced on February 14, 1961, replacing Round Sterling as legal tender, at two Rand = 1 Pound 10 shillings. 1961 was also the year the country became a republic and left the Commonwealth of Nations following a whites-only referendum.
• From 1982, the value of the currency started to erode due to mounting international pressure and sanctions against the country because of its apartheid policies. In July 1985, all foreign exchange transactions were suspended for three days to try to stop the devaluation.