Struggles and Decline: South Africa’s Currencies and their Challenges

South Africa’s Currencies

Amid South Africa’s recent struggles, the rand has declined in value. Its trajectory is influenced by global developments, such as the price of gold, which is one of the country’s main exports.

The rand was first introduced in 1961 when the country became a republic. It started off strong, trading at a rate of 1.40 USD to 1 rand.

The rand

South Africa is famous around the world for its stunning vistas, vibrant musical heritage, inspiring leaders like Nelson Mandela, and colorful currency, the rand. However, it is also a country struggling to overcome the legacy of apartheid and the effects of a global economic slowdown.

A currency is a medium of exchange, and its value depends on how well it performs when compared to other currencies. This can be measured in several ways, including by its exchange rate against the US dollar or British pound sterling, or by looking at how much buying power it has. Often, a currency’s buying power can also be determined by its inflation rate.

The krugerrand

The krugerrand was created in 1967 to market South African gold. Its name combines the surname of Paul Kruger and the word rand, which refers to South Africa’s unit of currency. The obverse of the coin displays Paul Kruger’s profile, while the reverse features a springbok antelope.

The coin’s weight and markings are important factors for verifying its authenticity. A genuine krugerrand will weigh exactly one ounce, while counterfeit coins may be underweight or show signs of wear.

Although it was originally minted to act as circulating money, the krugerrand is valued exclusively for its bullion content. Its alloy was created with durability in mind, and the gold is 22 karats.

The ZAR

The rand was introduced on 14 February 1961, replacing the South African pound at a rate of two rands to one pound. It is subdivided into 100 cents and takes its name from the Witwatersrand, a geological feature in Johannesburg where many of the gold deposits were originally found.

The ZAR is currently weaker than most major currencies, largely because of political and economic uncertainty in South Africa. The country’s high levels of poverty, crime, and unemployment also pressure the currency. However, some experts believe the rand could strengthen in the future due to South Africa’s improving economic prospects. Find out how much you can get for your money when sending to South Africa with our handy currency calculator.

The Eswatini lilangeni

The currency of the landlocked Kingdom of eSwatini is the lilangeni, which is subdivided into 100 cents. It was introduced in 1974 on a par with the South African rand as part of the Common Monetary Area.

The king of the small, landlocked country that borders South Africa and Mozambique surprised everyone in April 2018 when he changed the name of the nation to eSwatini from Swaziland. The change took effect immediately, and the old and new names circulate side by side.

The World Bank’s current five-year strategy for the country focuses on two high-level, long-term outcomes: increased private sector employment and enhanced human capital development. The bank also supports efforts to improve budget management and governance.

The Mozambican metical

The metical (/metI,kal/; plural meticais) is the national currency of Mozambique. It was introduced in 1980 to replace the Portuguese escudo at par and is divided into 100 centavos. The name ‘metical’ comes from the Arabic mithqal, which is a unit of weight and an alternative name for the gold dinar coin that was used across much of Africa until the 19th century.

If you’re thinking about sending money to Mozambique, you should look for an option that charges low or no fees. Many international banks impose hidden exchange rates and additional charges, which can make a big dent in the total amount of your transfer. The best alternatives to bank transfers include prepaid travel cards from top online travel money providers, such as Wise Account and Revolut.

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