A year ago, the rand seemed likely to follow the South African economy into the Covid-19 intensive care ward.
Yet today, the rand has strengthened to its best level against the dollar for almost two years, at around R13.50/$. Some investment professionals suggest it could touch R11/$, while foreign investors are showing an appetite for South African bonds and commodity shares.
So perhaps you’re thinking it was a bad idea to take your money offshore and are considering bringing some rands home to take advantage of gains in local assets?
Before you do that, you need to consider how likely it is that the South African economy will perform better than the US economy in the medium to long term and whether you can take the risk of having all your assets in South Africa.
How sustainable is the rand at R13.50 – or even R11 – to the dollar? Does rand strength reflect the current fundamentals of the South African economy, including recovery from Covid-19, the likely inflation…