What is ZAR (South African Rand)?
The symbol ZAR is the currency abbreviation for the South African rand. 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 a majority of South Africa's gold deposits, is located on this ridge.
Origins of 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.
- The South African Rand (ZAR) was introduced in February 1961 and mostly held a steady peg against the US dollar until the end of apartheid.
- Since then, its value has depreciated as the South African economy has become increasingly linked to the rest of the world.
Rand's Fluctuating Fortunes
For the most part, rand's value was linked to the price of gold, South Africa's main export, during its early days. But major world developments have also determined ZAR's price trajectory. 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.
The figures depicted in the rand's banknotes reflect South Africa's shifting identity and priorities, political and otherwise. Up until the 1990s, the rand mainly contained photos of people and notable leaders from the apartheid regime. After dismantling of the apartheid system, photos of wildlife figures were also included. In 2012, a rand banknote containing a picture of ANC leader Nelson Mandela was released.