I was reading an article today that pegged the true value of the Rand at R9 to the USD. The Rand is currently trading at R18.26 to the USD which is far better than the R20 we saw in the last couple of months.
The problem with the Rand is that the value drops very quickly if there is any crisis in the world like we saw with trumps tariffs and then the currency slowly draws back the lost ground until the next crisis. As a currency the Rand compared to other countries the volatility is very high.
Experts have pegged the fair value of the Rand at between R16 and R17 and due to the risk factors their is a premium risk price and why we see the Rand trading at R18.26. The fair value is calculated on comparing prices of similar goods in other countries which is similar to using the MacDonald's index which I am sure you have seen before.
Using a price comparison on items never tells the full story as it does not factor in salaries which would the show the fuller picture. If someone was earning $5K monthly in the US it ever reflects how much someone is earning in SA ad here would be no ways someone would be earning 9 x or 17 x in Rand to make it similar. This is why comparison charts are a guide and nothing else as they do not reflect reality.
The True value of the Rand at R9 will never be achieved because that would require the country running as it should without high state borrowing ,the ports working as they should and every other government department being efficient and maintaining and expanding the infrastructure. As you can see this is never going to happen and is a dream scenario as the majority of government is out of their depth educationally and we expect failings across the board.
If you cannot do basic arithmetic the how are you going to budget the books? Reminds me of a true story regarding how the ANC under President Zuma selected their Finance Minister. One of the party members had done an online course in accountancy and that was enough to be given the role. They never mentioned what the course was or whether he passed it or not and why with this type of thinking the country will always struggle and be a high risk investment.
The ANC government wants to install communist ideals yet even the communist countries are embracing capitalism and those days are long gone. I am not sure why they believe so much in this failed type of economy when we have such a high unemployment rate which is rooted and has been created by having a corrupt mentality.
The experts are kidding themselves giving false hope to everyone when we all know the Rand is going to tank and this outcome is inevitable. I sill believe we will see a R30 to USD before or close to 2030. According to may specialists the Dollar has been under performing which also effects the Rand giving a false value when in fact we are probably much closer to the R20 value.