GBP to ZAR
offered by Moneycorp, World First

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Category:
Foreign Exchange
Central bank:
South African Reserve Bank
Bank notes:
R10, R20, R50, R100, R200
Coins:
R1, R2, R5, 5c, 10c, 20c
Features:
24/7 trading available

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Description

GBP to ZAR

A brief history

The UK’s pound is, of course, one of the most widely traded currencies on the global markets, and it dates back hundreds of years.

For its part, the South African rand (ZAR) was launched in the then Union of South Africa on Valentine’s Day 1961, three months before the nation declared itself a republic.

So the rand is a relatively young currency. It replaced the South African pound at a rate of two rands to the pound as the country’s official unit of money. It’s now the world’s eighteenth most traded currency.

It takes its name from Witwatersrand or the ‘ridge of white waters’ on which Johannesburg is built and where most original South African gold deposits were found.

Subdivided into 100 cents, the rand is accepted in southern Africa’s Common Monetary Area, which includes Swaziland, Namibia and Lesotho as well as South Africa. (However, the first three also have their own currencies, pegged at par with the rand.)

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The South African economy

South Africa has the African continent’s most developed economy.

The South African Reserve Bank manages the country’s monetary policy. The bank’s Monetary Policy Committee (MPC) sets the national interest rate.

As the world’s 31st biggest economy, it’s a middle-income emerging market, with a diversified industrial sector. South Africa is also a major commodities producer. However, the economy has suffered from weak infrastructure and high levels of unemployment in recent years.

How the GBP/ZAR exchange rate has changed over the years

Until 1968, one GBP sterling would buy you a couple of rands. Then, until 1982, there was a fluctuation between 1.4 and 1.7 rands to the pound. Thereafter, pressure against apartheid weakened the rand’s value. By 1998, there were more than eight rands to the pound, a rate which continued to climb.

There was dramatic depreciation and equally dramatic recovery over the years. But since 2006, this currency has stabilised, indeed it has steadily risen since 2011.

Brexit and the possibility of the UK leaving the European Union with no deal in place have also affected this currency pair. In the summer of 2019, causing the British pound to slump against a number of currencies, including the rand.

Factors affecting the GBP/ZAR exchange rate

The behaviour of this currency pair can often be erratic since many different factors can have an impact on the two economies.

So myriad political and economic influences affect the rate at which this currency pair trades. When either Britain or South Africa’s central banks make a decision on inflation, for example, this creates waves on the foreign exchange market.

Such events have an impact on whether or not investors trade in either currency, which in turn also affects the exchange rate.

The rand’s strength is heavily dependent on South Africa’s economic development – and this has struggled in recent years.

The rand also relies strongly on global gold and raw material prices.

Trading this currency pair

Trade these currencies as a regular forex contract or a Contract for Difference (CFD).

It’s a relatively minor currency pairing, but GBP to ZAR nonetheless has a considerable global following. It could be an extremely useful tool in the portfolio of an experienced trader.

Not what you’re looking for? Head to Roger.com for more financial trading options.

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