Rand down 9% – the worst rout since October 2008

The rand experienced its sharpest drop in more than seven years on Monday morning as market mayhem in China and losses in the US discouraged risk taking.

The beleaguered South African currency fell by as much nine percent – the most since October 2008 – to R17.92 per dollar.

It has since clawed back some of its value.

The Money Show’s Bruce Whitfield interviewed John Cairns, Currency Strategist at Rand Merchant Bank.

Scroll down for quotes from the audio below.

There’s a lot of panic globally about the slowdown in China.

John Cairns, Currency Strategist at Rand Merchant Bank

There is panic about South Africa and what happened in December.

John Cairns, Currency Strategist at Rand Merchant Bank

This is now the longest period of continuous rand decline in history.

John Cairns, Currency Strategist at Rand Merchant Bank

South Africa has become a net creditor to the world. This is the first time ever that this has happened.

John Cairns, Currency Strategist at Rand Merchant Bank

Some currency models suggests the rand is heavily oversold.

John Cairns, Currency Strategist at Rand Merchant Bank

You can get four Bic Macs in South Africa for the price of one in Switzerland.

John Cairns, Currency Strategist at Rand Merchant Bank

The Reserve Bank will have to hike interest rates quite considerably.

John Cairns, Currency Strategist at Rand Merchant Bank

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This article first appeared on 702 : Rand down 9% – the worst rout since October 2008


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