South African Rand ZAR: History of the Currency

During the global coronavirus pandemic, the rand weakened to more than R17 per USD and, as of February 2024, settled to nearly R19 per USD. Several African countries in the region still peg their national currencies to the rand, including the Eswatini Lilangeni and Lesotho Loti. In 1986, following the substantial depreciation of the rand, the countries replaced the RMA with the Common Monetary Area (CMA) to manage monetary policy. The CMA and the Southern African Customs Union work together to help member nations. The terms of the new agreement provided Swaziland with additional flexibility in its monetary policy.

By the early 1980s, high inflation and mounting political pressure combined with sanctions placed against the country due to international opposition to the apartheid system had started to erode its value. The currency broke above parity with the dollar for the first time in March 1982. It continued to trade between R1 and R1.30 to the dollar until June 1984, when the currency’s depreciation gained momentum. By February 1985, it was trading at over R2 per dollar, and in July of that year, all foreign exchange trading was suspended for three days to try to stop the depreciation.

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Up until the 1990s, the rand mainly contained photos of people and notable leaders from the apartheid regime. This post has everything you need to know about converting South African Rand (ZAR) to USD, including where to secure the best exchange rates and how to avoid paying high fees on your conversion. For the most part, the rand’s value was linked to the price of gold, South Africa’s main export, during its early days. In recent years, the rand is somewhat correlated with gold prices as the South African economy still relies on its gold exports. Instead, a series of banknotes containing photos of the country’s treasured wildlife were introduced.

Wise gives you the real, mid-market, exchange rate, so you can make huge savings on your international money transfers. Krugerrands and the South African rand are not the same currency. Krugerrands are gold coins that have legal tender status in South Africa but no assigned rand value.

US dollars to South African rand today

Krugerrands are gold coins that were minted by the Republic of South Africa in 1967 to help promote South African gold to international markets and to make it possible for individuals to own gold. Up until the early 1970s, the rand was worth around R1.5 per U.S. dollar (USD). However, over the ensuing decades, the rand exchange rate has depreciated or weakened, meaning it costs more rand to convert to one U.S. dollar. For example, it had cost approximately R2.55 to convert to one USD in 1990, and by 1999, the exchange rate was R6.14 to the USD. The South African rand (ZAR) is the currency of South Africa and is issued by the South African Reserve Bank. The name is derived from the word ‘Witwatersrand’, which means ‘ridge of white waters’.

If the price of gold changes, so does the price of Krugerrands. South Africa experienced major political changes in the early 1990s. For years, South Africa was ruled by apartheid; by the late 1980s and early 1990s, the political landscape had changed. One of the outspoken critics and leaders of the anti-apartheid struggle was Nelson Mandela—imprisoned for his views for 27 years.

R1.000 ZAR = $0.05634 USD

The ridge is where most of South Africa’s gold deposits were found and where Johannesburg was built. Once you know that information, multiply the amount you have in ZAR by the current exchange rate. The resulting number will show you the amount of USD that you have to spend on your trip. The other option is to do the calculation manually using a simple mathematical formula. However, in order to do this, you need to know the current exchange rate.

USD is used in about 40% of global trade and nearly 80% of all global cross-border transactions, according to financial services firmSchwab. If you’re planning a trip to the United States in the near future, you may want to exchange some of your money into the United States dollar, the country’s official currency. These are the average exchange rates of these two currencies for the last 30 and 90 days. The coins still have legal tender status in South Africa, although Krugerrands were never assigned a rand value. Krugerrands were designed to derive their value exclusively from the price of gold at the time they are traded.

Above all else, the central bank is in charge of cycle analytics for traders the achievement and maintenance of price stability. This also includes intervention in the forex markets when necessary. All investment services are provided by the respective Wise Assets entity in your location.

In 1921, the Reserve Bank of South Africa was established as the central bank. In 1961, the https://forexanalytics.info/ South African Rand replaced the Pound under a decimalized system. Banks often advertise free or low-cost transfers, but add a hidden markup to the exchange rate.

1. The other option is to do the calculation manually using a simple mathematical formula.
2. You can either make the conversion using a currency calculator or by hand.
3. Compare our rate and fee with our competitors and see the difference for yourself.
4. Krugerrands were designed to derive their value exclusively from the price of gold at the time they are traded.
5. The rand comes from the word “Witwatersrand,” which means “white waters ridge.” Johannesburg, the location of a majority of South Africa’s gold deposits, is located on this ridge.

Krugerrands derive their value from the gold out of which they are made. If the price of gold fluctuates, so does the value of Krugerrands. Krugerrands are one of the most frequently traded forms of gold. Using a currency conversion calculator is often the easiest way to get an estimate when you’re converting currency. Since exchange rates fluctuate on a daily basis, using a calculator can ensure your math is correct. The U.S. dollar is a global reserve currency, which means foreign central banks hold it in their reserves in addition to their own currency.

Modeled on the Bank of England (BoE), the South African Reserve Bank (SARB) stands as the monetary authority for South Africa and issues its currency. Taking on major responsibilities similar to those of other central banks, the SARB is also known as a creditor in certain situations, a clearing bank, and a major custodian of gold. Krugerrands are among the most frequently traded gold coins in the world market.

He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. If you don’t spend all of your USD on your trip, you have 30 days upon your re-entry to South Africa to sell it back to an authorized dealer. Calculating a conversion of ZAR to USD is fairly simple. You can either make the conversion using a currency calculator or by hand. Three countries that peg their currency with the rand are Eswatini, Lesotho, and Namibia.