South African rand
Encyclopedia
The rand is the currency
of South Africa
. It takes its name from the Witwatersrand
(White-waters-ridge in English
), the ridge upon which Johannesburg
is built and where most of South Africa's gold deposits were found. The rand has the symbol "R" and is subdivided into 100 cent
s, symbol "c". The ISO 4217 code is ZAR, from Dutch
Zuid-Afrikaanse rand. (South African Rand). This is echoed in South Africa's internet top-level domain
name ".za
" from the Dutch Zuid-Afrika, meaning "South Africa".
The rand is the currency of the Common Monetary Area
between South Africa
, Swaziland
and Lesotho
. Although Namibia
withdrew itself from the Common Monetary Area
, the rand is still legal tender there.
as legal tender, at the rate of 2 rand = 1 pound or 10 shilling
s to the rand. This took place in the same year that the Republic of South Africa was established.
trading was suspended for 3 days to try to stop the devaluation.
By the time that State President
PW Botha made his Rubicon
speech on 15 August 1985, it had weakened to R2.40 per dollar. The currency recovered somewhat between 1986–88, trading near the R2 level most of the time and even breaking beneath it sporadically. The recovery was short-lived however, and by the end of 1989 the rand was trading at levels of more than R2.50 per dollar.
As it became clear in the early 1990s that the country was destined for black majority rule and one reform after the other was announced, uncertainty about the future of the country hastened the depreciation until the level of R 3 to the dollar was breached in November 1992. A host of local and international events influenced the currency after that, most notably the 1994 democratic election
which saw it weaken to over R 3.60 to the dollar, the election of Tito Mboweni
as the new governor of the South African Reserve Bank
, and the inauguration of President Thabo Mbeki
in 1999 which saw it quickly slide to over R 6 to the dollar. The controversial land reform program that was kicked off in Zimbabwe
, followed by the September 11, 2001 attacks, propelled it to its weakest historical level of R 13.84 to the dollar in December 2001.
This sudden depreciation in 2001 led to a formal investigation, which in turn led to a dramatic recovery. By the end of 2002, the currency was trading at under R 9 to the dollar again, and by the end of 2004 was trading at under R 5.70 to the dollar. The currency softened somewhat in 2005, and was trading at around R 6.35 to the dollar at the end of the year. At the start of 2006 however, the currency resumed its rally, and, as of 19 January 2006, was trading at under R 6 to the dollar again. However, during the second and third quarters of 2006 (i.e. April through September), the rand weakened significantly.
In sterling terms, it fell from around 9.5p to just over 7p, losing some 25% of its international trade-weighted value in just six months. Late in 2007, the rand rallied modestly to just over 8p, only to experience a precipitous slide during the first quarter of 2008.
This downward slide could be attributed to a range of factors: South Africa's worsening current account deficit, which widened to a 36‑year high of 7.3% of gross domestic product (GDP) in 2007; inflation at a five-year high of just under 9%; escalating global risk aversion as investors' concerns over the spreading impact of the sub-prime crisis grew; and a general flight to "safe havens", away from the perceived risks of emerging markets. The rand depreciation was exacerbated by the Eskom electricity crisis, which arose from the utility being unable to meet the country's rapidly growing energy demands.
In particular, major mines were shut down, with Eskom warning that major new industrial projects could not be powered until additional power generation capacity could be brought on stream, something unlikely to be achieved for at least another 5 years. This would have a significant impact on production and exports by South Africa's mining industry, and would thus worsen an already worrisome current account deficit. It is particularly unfortunate that this should have happened at a time of record high prices for hard and soft commodities. The situation has since stabilised.
In an effort to curb counterfeiting, a new R 5 coin was released in August 2004. Security features introduced on the coin include a bi-metal
design (similar to the €1
and €2 coins
, the Thai 10 Baht coin, the British £2 coin and the Canadian $2 coin
), a specially-serrated security groove along the rim and micro-lettering.
The first series of rand banknotes was introduced in 1961 in denominations of 1, 2, 10 and 20 rand, with similar designs and colours to the preceding pound notes to ease the transition. They bore the image of Jan van Riebeeck
, the first V.O.C.
administrator of Cape Town
. Like the last pound
notes, they came in two variants, one with English
written first and the other with Afrikaans
written first. This practice was continued in the 1966 series which included the first 5 rand notes but did not include the 20 rand denomination.
The 1978 series began with denominations of 2, 5 and 10 rand, with 20 and 50 rand introduced in 1984. This series saw a major design change. In addition, the series has only one variant for each denomination of note. Afrikaans was the first language on the 2, 10 and 50 rand, while English was the first language on 5 and 20 rand. The notes bore the image of Jan van Riebeeck
.
In the 1990s, the notes were redesigned with images of the Big Five
wildlife species. With the 2 and 5 rand coins replacing notes, notes were introduced in 1994 for 100 and 200 rand.
The 2005 series has the same principal design, but with additional security features such as colour shifting ink on the 50 rand and higher and the EURion constellation
. The obverses of all denominations are printed in English, while two other languages are printed on the reverses, making all eleven official languages of South Africa
available.
In 2010, the South African Reserve Bank
and commercial banks withdrew all 1990 series R 200 banknotes due to relatively high quality counterfeit notes in circulation.
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
of South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
. It takes its name from the Witwatersrand
Witwatersrand
The Witwatersrand is a low, sedimentary range of hills, at an elevation of 1700–1800 metres above sea-level, which runs in an east-west direction through Gauteng in South Africa. The word in Afrikaans means "the ridge of white waters". Geologically it is complex, but the principal formations...
(White-waters-ridge in English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
), the ridge upon which Johannesburg
Johannesburg
Johannesburg also known as Jozi, Jo'burg or Egoli, is the largest city in South Africa, by population. Johannesburg is the provincial capital of Gauteng, the wealthiest province in South Africa, having the largest economy of any metropolitan region in Sub-Saharan Africa...
is built and where most of South Africa's gold deposits were found. The rand has the symbol "R" and is subdivided into 100 cent
Cent (currency)
In many national currencies, the cent is a monetary unit that equals 1⁄100 of the basic monetary unit. Etymologically, the word cent derives from the Latin word "centum" meaning hundred. Cent also refers to a coin which is worth one cent....
s, symbol "c". The ISO 4217 code is ZAR, from Dutch
Dutch language
Dutch is a West Germanic language and the native language of the majority of the population of the Netherlands, Belgium, and Suriname, the three member states of the Dutch Language Union. Most speakers live in the European Union, where it is a first language for about 23 million and a second...
Zuid-Afrikaanse rand. (South African Rand). This is echoed in South Africa's internet top-level domain
Top-level domain
A top-level domain is one of the domains at the highest level in the hierarchical Domain Name System of the Internet. The top-level domain names are installed in the root zone of the name space. For all domains in lower levels, it is the last part of the domain name, that is, the last label of a...
name ".za
.za
.za is the Internet country code top-level domain for South Africa. It is administered by the .None of the official names for South Africa can be abbreviated to ZA, which is an abbreviation of the Dutch Zuid-Afrika...
" from the Dutch Zuid-Afrika, meaning "South Africa".
The rand is the currency of the Common Monetary Area
Common Monetary Area
The Common Monetary Area links South Africa, Lesotho and Swaziland into a monetary union. It is allied to the Southern African Customs Union . Namibia automatically became a member upon independence, but withdrew with the introduction of the Namibian dollar in 1993...
between South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
, Swaziland
Swaziland
Swaziland, officially the Kingdom of Swaziland , and sometimes called Ngwane or Swatini, is a landlocked country in Southern Africa, bordered to the north, south and west by South Africa, and to the east by Mozambique...
and Lesotho
Lesotho
Lesotho , officially the Kingdom of Lesotho, is a landlocked country and enclave, surrounded by the Republic of South Africa. It is just over in size with a population of approximately 2,067,000. Its capital and largest city is Maseru. Lesotho is a member of the Commonwealth of Nations. The name...
. Although Namibia
Namibia
Namibia, officially the Republic of Namibia , is a country in southern Africa whose western border is the Atlantic Ocean. It shares land borders with Angola and Zambia to the north, Botswana to the east and South Africa to the south and east. It gained independence from South Africa on 21 March...
withdrew itself from the Common Monetary Area
Common Monetary Area
The Common Monetary Area links South Africa, Lesotho and Swaziland into a monetary union. It is allied to the Southern African Customs Union . Namibia automatically became a member upon independence, but withdrew with the introduction of the Namibian dollar in 1993...
, the rand is still legal tender there.
History
The rand was introduced on 14 February 1961. A Decimal Coinage Commission had been set up in 1956 to consider a move away from the denominations of pounds, shillings and pence, submitting its recommendation on 8 August 1958. It replaced the South African poundSouth African pound
In 1825, an imperial order-in-council made sterling coinage legal tender in all the British colonies. At that time, the only British colony in Southern Africa was the Cape of Good Hope Colony. As time went on, the British pound sterling and its associated subsidiary coinage became the currency of...
as legal tender, at the rate of 2 rand = 1 pound or 10 shilling
Shilling
The shilling is a unit of currency used in some current and former British Commonwealth countries. The word shilling comes from scilling, an accounting term that dates back to Anglo-Saxon times where it was deemed to be the value of a cow in Kent or a sheep elsewhere. The word is thought to derive...
s to the rand. This took place in the same year that the Republic of South Africa was established.
Brief exchange rate history
A rand was worth US $ 1.40 from the time of its inception in 1961 until 1982, when mounting political pressure combined with sanctions placed against the country because of apartheid started to erode its value. The currency broke above parity with the dollar for the first time in March 1982, and continued to trade between R 1–R 1.30 to the dollar until June 1984, when depreciation of the currency gained momentum. By February 1985, it was trading at over R2 per dollar, and, in July that year all foreign exchangeForeign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
trading was suspended for 3 days to try to stop the devaluation.
By the time that State President
State President of South Africa
State President, or Staatspresident in Afrikaans, was the title of South Africa's head of state from 1961 to 1994. The office was established when the country became a republic in 1961, and Queen Elizabeth II ceased to be head of state...
PW Botha made his Rubicon
Rubicon
The Rubicon is a shallow river in northeastern Italy, about 80 kilometres long, running from the Apennine Mountains to the Adriatic Sea through the southern Emilia-Romagna region, between the towns of Rimini and Cesena. The Latin word rubico comes from the adjective "rubeus", meaning "red"...
speech on 15 August 1985, it had weakened to R2.40 per dollar. The currency recovered somewhat between 1986–88, trading near the R2 level most of the time and even breaking beneath it sporadically. The recovery was short-lived however, and by the end of 1989 the rand was trading at levels of more than R2.50 per dollar.
As it became clear in the early 1990s that the country was destined for black majority rule and one reform after the other was announced, uncertainty about the future of the country hastened the depreciation until the level of R 3 to the dollar was breached in November 1992. A host of local and international events influenced the currency after that, most notably the 1994 democratic election
South African general election, 1994
The South African general election of 1994 was an election held in South Africa to mark the end of apartheid, therefore also the first held with universal adult suffrage. The election was conducted under the direction of the Independent Electoral Commission .Millions queued in lines over a three...
which saw it weaken to over R 3.60 to the dollar, the election of Tito Mboweni
Tito Mboweni
Tito Mboweni was the eighth Governor of the South African Reserve Bank. He succeeded Dr. Christian Lodewyk Stals on the 8 August 1999 and was succeeded by Gill Marcus who replaced him as Governor on 9 November 2009. He is currently the Chairman of AngloGold Ashanti.The youngest of three children,...
as the new governor of the South African Reserve Bank
South African Reserve Bank
The South African Reserve Bank is the central bank of South Africa. It was established in 1921 after Parliament passed an act, the "Currency and Bank Act of 10 August 1920," as a direct result of the abnormal monetary and financial conditions which World War I had brought...
, and the inauguration of President Thabo Mbeki
Thabo Mbeki
Thabo Mvuyelwa Mbeki is a South African politician who served two terms as the second post-apartheid President of South Africa from 14 June 1999 to 24 September 2008. He is also the brother of Moeletsi Mbeki...
in 1999 which saw it quickly slide to over R 6 to the dollar. The controversial land reform program that was kicked off in Zimbabwe
Zimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
, followed by the September 11, 2001 attacks, propelled it to its weakest historical level of R 13.84 to the dollar in December 2001.
In sterling terms, it fell from around 9.5p to just over 7p, losing some 25% of its international trade-weighted value in just six months. Late in 2007, the rand rallied modestly to just over 8p, only to experience a precipitous slide during the first quarter of 2008.
This downward slide could be attributed to a range of factors: South Africa's worsening current account deficit, which widened to a 36‑year high of 7.3% of gross domestic product (GDP) in 2007; inflation at a five-year high of just under 9%; escalating global risk aversion as investors' concerns over the spreading impact of the sub-prime crisis grew; and a general flight to "safe havens", away from the perceived risks of emerging markets. The rand depreciation was exacerbated by the Eskom electricity crisis, which arose from the utility being unable to meet the country's rapidly growing energy demands.
In particular, major mines were shut down, with Eskom warning that major new industrial projects could not be powered until additional power generation capacity could be brought on stream, something unlikely to be achieved for at least another 5 years. This would have a significant impact on production and exports by South Africa's mining industry, and would thus worsen an already worrisome current account deficit. It is particularly unfortunate that this should have happened at a time of record high prices for hard and soft commodities. The situation has since stabilised.
Coins
Coins were introduced in 1968 in denominations of ½, 1, 2½, 5, 10, 20, 50 cents. In 1965, 2-cent coins replaced the 2½-cent coins. The ½-cent coin was last struck for circulation in 1973. The 2-rand was introduced in 1989, followed by 5-rand coins in 1994. The 1- and 2-cent coins were discontinued in April 2002, primarily due to inflation having devalued them. All prices are now rounded to the nearest 5 cents.In an effort to curb counterfeiting, a new R 5 coin was released in August 2004. Security features introduced on the coin include a bi-metal
Bi-metallic coins
Bi-metallic coins are coins consisting of more than one metal or alloy, generally arranged with an outer ring around a contrasting center. Common circulating examples include the €1, €2, British £2, Canadian $2, South African R5, Turkish 1 lira, and all Mexican coins of $1 or higher...
design (similar to the €1
1 euro coins
1 euro coins are made of two alloys: the inner part of cupronickel, the outer part of nickel brass. All coins have a common reverse side and country-specific national sides...
and €2 coins
2 euro coins
2 euro coins are made of two alloys: the inner part of nickel brass, the outer part of copper-nickel. All coins have a common reverse side and country-specific national sides...
, the Thai 10 Baht coin, the British £2 coin and the Canadian $2 coin
Toonie
The Canadian 2 dollar coin, commonly called Toonie, was introduced on February 19, 1996 by Public Works minister Diane Marleau. The Toonie is a bi-metallic coin which bears an image of a polar bear, by Campbellford, Ontario artist Brent Townsend, on the reverse. The obverse, like all other current...
), a specially-serrated security groove along the rim and micro-lettering.
Banknotes
Jan van Riebeeck
Johan Anthoniszoon "Jan" van Riebeeck was a Dutch colonial administrator and founder of Cape Town.-Biography:...
, the first V.O.C.
Dutch East India Company
The Dutch East India Company was a chartered company established in 1602, when the States-General of the Netherlands granted it a 21-year monopoly to carry out colonial activities in Asia...
administrator of Cape Town
Cape Town
Cape Town is the second-most populous city in South Africa, and the provincial capital and primate city of the Western Cape. As the seat of the National Parliament, it is also the legislative capital of the country. It forms part of the City of Cape Town metropolitan municipality...
. Like the last pound
South African pound
In 1825, an imperial order-in-council made sterling coinage legal tender in all the British colonies. At that time, the only British colony in Southern Africa was the Cape of Good Hope Colony. As time went on, the British pound sterling and its associated subsidiary coinage became the currency of...
notes, they came in two variants, one with English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
written first and the other with Afrikaans
Afrikaans
Afrikaans is a West Germanic language, spoken natively in South Africa and Namibia. It is a daughter language of Dutch, originating in its 17th century dialects, collectively referred to as Cape Dutch .Afrikaans is a daughter language of Dutch; see , , , , , .Afrikaans was historically called Cape...
written first. This practice was continued in the 1966 series which included the first 5 rand notes but did not include the 20 rand denomination.
The 1978 series began with denominations of 2, 5 and 10 rand, with 20 and 50 rand introduced in 1984. This series saw a major design change. In addition, the series has only one variant for each denomination of note. Afrikaans was the first language on the 2, 10 and 50 rand, while English was the first language on 5 and 20 rand. The notes bore the image of Jan van Riebeeck
Jan van Riebeeck
Johan Anthoniszoon "Jan" van Riebeeck was a Dutch colonial administrator and founder of Cape Town.-Biography:...
.
In the 1990s, the notes were redesigned with images of the Big Five
Big Five game
The phrase Big Five game was coined by white hunters and refers to the five most difficult animals in Africa to hunt on foot. The term is still used in most tourist and wildlife guides that discuss African wildlife safaris. The collection consists of the lion, African elephant, cape buffalo,...
wildlife species. With the 2 and 5 rand coins replacing notes, notes were introduced in 1994 for 100 and 200 rand.
The 2005 series has the same principal design, but with additional security features such as colour shifting ink on the 50 rand and higher and the EURion constellation
EURion constellation
The EURion constellation is a pattern of symbols found on a number of banknote designs worldwide since about 1996. It is added to help software detect the presence of a banknote in a digital image. Such software can then block the user from reproducing banknotes to prevent counterfeiting using...
. The obverses of all denominations are printed in English, while two other languages are printed on the reverses, making all eleven official languages of South Africa
Languages of South Africa
South Africa has eleven official languages: Afrikaans, English, Ndebele, Northern Sotho, Sotho, Swazi, Tswana, Tsonga, Venda, Xhosa and Zulu. Fewer than one percent of South Africans speak a first language other than an official one. Most South Africans can speak more than one language. Dutch and...
available.
In 2010, the South African Reserve Bank
South African Reserve Bank
The South African Reserve Bank is the central bank of South Africa. It was established in 1921 after Parliament passed an act, the "Currency and Bank Act of 10 August 1920," as a direct result of the abnormal monetary and financial conditions which World War I had brought...
and commercial banks withdrew all 1990 series R 200 banknotes due to relatively high quality counterfeit notes in circulation.
External links
- US Federal Reserve Bank historical exchange rate data
- South African Currency Page, with a short description of each note.
- South African Currency Page (old rand), a short description of pre-1994 (apartheid-era) notes.