Banks, like FirstRand Namibia, have been playing a key role in establishing this market. Equally, banks are instrumental in developing, capacitating and growing its potential. The main purpose of this trade is that all the parties can aspire to the same level of development and equitable economic advances.
The rand is a free-floating currency and its supply-demand curve is constantly evolving and influenced by many factors. Some of these factors are external and some are internal, and the rand frequently experiences volatility. During , the rand traded to a high of As we headed into , we have already seen it trading close to By the middle of March, it was trading at This depreciation can be both good and bad.
For example, with a weaker currency, it becomes easier and cheaper for tourists to visit our shores and boost our tourism industry. However, regulations to curb the further spread of Covid, particularly closed borders, have resulted in the tourism sector not being able to capitalise on this for the moment. On the other hand, our exporters of goods receive more local currency once their proceeds come in, which again filters through to more revenue for our government.
The flip side is that imports become more expensive, especially fuel imports, and even more so for companies importing to produce exportable goods.
So why do we want to stay pegged to the rand? Would we not be better off trying to make it on our own? There are, of course, two different schools of thought: those in favour of, and those against the peg. Being a trader, a part of me really wants us to break the peg against the rand. We can become the masters of our own future, make our own prices and create value, guide our own ship and not trail the rand.
