‘Domestic confidence needs to improve for rand to strengthen’

Economists say while the global market goes through an adjustment, domestic issues have a real impact.

FILE. Erratic trading on the Asian markets also had an impact on the rand. Picture: Supplied.

JOHANNESBURG - Economists say domestic confidence needs to improve in order for the economy to grow and for the rand to strengthen.

In recent weeks, the rand hit an all-time low against the dollar after President Jacob Zuma replaced finance minister Nhlanhla Nene.

The unexpected move late last year to replace Nene with David van Rooyen raised concerns and the rand was heavily affected.

Zuma then changed his mind and re-appointed former finance minister Pravin Gordhan.

Erratic trading on the Asian markets also had an impact on the rand.

The African National Congress (ANC)'s Zizi Kodwa says South Africans must realise the country is part of a global village.

"We are affected by circumstances, not of our own doing as a developing economy. But it's because we're part of a global village - therefore it can happen elsewhere across the world and have a negative impact on us."

But economist Iraj Abedian says while the global financial market is going through an adjustment, domestic issues have a real impact.

"All in all, the domestic economy lacks confidence so that adds to the volatility of the currency unless we do something about it."