The South African rand was a very strong currency until the early 1980s. Due to political unrest the rand declined slowly but was controlled artificially by the government. After the first democratic elections in April
|Exchange rates: South Africa|
|rand (R) per US$1|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
1994, the value of the rand dropped dramatically. In 1996 the South African rand was valued at R4.30 per U.S. dollar, but by May 2001 the rand was valued at R7.90 per U.S. dollar. The very weak rand causes imports to South Africa to be very expensive and almost unaffordable. However, the devalued rand does make it far easier to export South African products, which seem a bargain to foreign buyers.
The South African financial sector is very modern and can be compared with the best banking systems in the world. The central bank in South Africa is the South African Reserve Bank. The South African Reserve Bank is responsible for monetary policy, and for ensuring that the South African money and banking system is sound, meets the requirements of the community, and keeps abreast of developments in international finance.
South Africa has one of the oldest stock exchanges in the world. The Johannesburg Stock Exchange (JSE) was established on 8 November 1887. The JSE provides a market where securities can be freely traded under a regulated procedure. It not only channels funds into the economy but also provides investors with returns on investments in the form of dividends. All buying and selling of stocks on the JSE is done via computer.