Currency in South Africa is known as Rand. Today, when compared to the US dollar, forecasters show that an almost 30% depreciation has occurred in the past 12 months, currently sitting at 5.04. When looking at the Rand exchange rate, this determines how much one currency compared to the US dollar would be worth, which means currency that is worth in terms of another.
For anyone interested in exchanging the South African Rand or simply looking at current rates, these are quoted daily through a variety of reputable and reliable online sites. For this country, the primary stock market index is called JALSH, which was able to rally points or 9.57% during the past four weeks. In 2009, stocks were traded at 18641 but when looking at the past 12 months, forecasters show that 9622 points were rallied, pushing stocks up almost 52%.
Now, when looking at the South African Rand specific to inflation, this hit at 6.20% for the first month of 2010. When talking about inflation rate, this equation that refers to the general rise in price when being measured to a standard level of purchasing power. Although different measures are used, the most popular is called the CPI, used specifically to determine consumer prices. Another measuring tool is called GDP deflator, which can determine inflation overall for the domestic economy.
Okay, so what does all of this mean for the forecast of the South African Rand? To understand, we need to look at both consumer and business predictions and confidence. From the consumer side, there was an improvement to 6 in the last month of 2009, which was a huge rise from 1. This shows that confidence from a consumer standpoint when measured on a level of optimism for the South African Rand is great.
Keep in mind that in most cases, this would be expected when the unemployment rate is very low but measuring tools such as the GDP are high. Forecasters of the South African Rand will use consumer confidence as an indicator for the money that people would likely be willing to spend. Obviously, for professional forecasters of the stock market, this is extremely helpful.
The other aspect of forecasting has to do with business confidence. Looking at the level of confidence from December of 2009 to the beginning of March 2010, this took rose from 28 to 43. Just as with consumer confidence, forecasters use this information but in this case, it is how optimistic people of South Africa are in the way people operate businesses. Seeing a nice increase such as this is great news.
When business confidence rises, it shows that the current economy is not just stable but growing. One thing different from consumer confidence, with business confidence in the South African Rand, companies get to see how well consumer demand is doing before anyone else, which allows them to make required changes if needed.
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