Answer to Question #91886 in Macroeconomics for Mufamadi Ndweleni

Question

List four possible reasons for an appreciation of the rand against the US dollar. (Do not explain, just list) [4]

Answer 1

An increase in the rand rate against the dollar is possible if: the rand rate rises and / or the dollar rate drops.

Possible reasons:

1. meetings of central banks: the increase in the credit interest rate contributes to the growth of national currency in the international market. And vice versa, in the case of a reduction in the rate, the rate of the national currency will also likely decline.

2. the change in world prices for resources, such as oil

3. inflation, unemployment and other macroeconomic indicators

4. Geopolitics and safe haven assets. When geopolitical tensions arise in a particular region, the national currency of this country becomes cheaper.