DEFINITION of 'ZAR (South African Rand)'

The symbol USD/ZAR is the currency abbreviation for the South African rand (ZAR), the currency for South Africa. The South African rand is made up of 100 cents and is often presented with the symbol R. The rand comes from the word "Witwatersrand" which means "white waters ridge". Johannesburg, the location of the majority of South Africa's gold deposits, is located on this ridge.

BREAKING DOWN 'ZAR (South African Rand)'

The South African rand was first introduced in February 1961, just before the Republic of South Africa was established. The rand replaced the South African pound at a rate of 2 rand to 1 pound. Up until the early 1970s, the rand was worth around R1.5 per U.S. dollar. However, over the ensuing decades the rand has depreciated at a rapid rate, with substantial moves at the turn of the 21st century, and during the Great Recession.

As the political landscape changed in the early 1990s, the uncertainty saw the rand slowly depreciate to record low levels. The fall was exasperated when in 2001 the land reforms began to kick off. Soon after, the September 11 attacks saw global uncertainty hit and the rand take another steep dive, falling to R13 per U.S. dollar. 

After steadying through the early parts of the century, the rand was one of many emerging market currencies that plummeted during the financial crisis. As investors flocked to safe haven currencies such as the U.S. dollar and the Japanese yen, emerging market currencies suffered. In the span of 12-months the rand fell by nearly 50 percent against the U.S. dollar. 

Today, the rand is somewhat correlated with gold prices as the South African economy is reliant on its gold exports. However, as a fragile economy and unstable political landscape the rand is at the mercy of global uncertainty. 

RELATED TERMS
  1. NAD (Namibian Dollar)

    NAD is the currency abbreviation for the Namibian dollar, the ...
  2. South African Reserve Bank

    The South African Reserve Bank is the central bank of South Africa. ...
  3. BWP (Botswana Pula)

    BWP is the currency abbreviation for the Botswana pula, the currency ...
  4. African Development Bank - ADB

    African Development Bank - ADB - is a financial institution backed ...
  5. Currency Substitution

    Currency substitution is the use of a foreign currency in transactions ...
  6. JPY

    JPY is the currency abbreviation or the currency symbol for the ...
Related Articles
  1. Investing

    Profitable And Easy Ways To Invest In Africa

    Africa may hold the key to long-term portfolio success.
  2. Insights

    South Africa in Recession for First Time Since 2009, Rand Slumps

    South Africa entered recession in the second quarter for the first time since 2009, data showed on Tuesday, in a stinging blow to President Cyril Ramaphosa's efforts to revive the economy after ...
  3. Insights

    Protest Divestment and the End of Apartheid

    Learn about protest divestment and the impacts this practice can have beyond the financial sector through the example of Apartheid in South Africa.
  4. Investing

    Currency Positions You Can Take Now

    The foreign currency market is the largest financial market in the world, and investors in this market have many options.
  5. Investing

    Why You Should Pay Attention To Africa Right Now

    With vast natural resources and a huge, young population, Africa's lion economies could be the next big thing. But how to get exposure?
  6. Investing

    How to Profit During Trump's Inaugural Year (GS)

    Amid weaker growth in China, rising populism in Europe and a Donald Trump presidency, here are Goldman Sachs's top trade recommendations for 2017.
  7. Tech

    Why South Korean Bitcoin Price Is $1,000 Over Global Price

    Surging trade volume among South Korean Bitcoin exchanges has pushed prices $1000 higher than the global average.
  8. Tech

    Why Is South Korea So Important to Bitcoin Prices?

    South Korea is one of the largest markets for bitcoin traders worldwide, hence, its outsized impact on BTC prices.
  9. Investing

    Emerging Markets Catch Investor Interest: UBS

    In the wake of struggles in Turkey, investors are returning to emerging markets to 'buy the dip'.
  10. Investing

    Emerging Markets: Analyzing South Korea's GDP

    South Korea's transition from a war-devastated poor country to an affluent developed nation presents a phenomenal growth story.
RELATED FAQS
  1. How does the balance of trade impact currency exchange rates?

    Find out how the balance of trade affects a country's exchange rates and how those exchange rates can, in turn, affect the ... Read Answer >>
  2. Is there a world currency? If so, what is it?

    There is no such thing as a world currency. However, since World War II, the dominant or reserve currency of the world has ... Read Answer >>
  3. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
  4. Why isn't the U.S. dollar worth more than the British pound?

    When one country's currency is worth more than another, it does not necessarily indicate a stronger economy. Here's why. Read Answer >>
Trading Center