exchange rate

[murdock]

i was looking at a graph of the exchange rate since last year and noticed a steady decline...

what do you think the chances are that it will go below R4 or even as low as 1 to 1 anyone have experience with this type of thing.

i tell you why i want to spend R100 000 on a piece of equipment but i am not in a hurry to buy it...in fact i am watching the exchange rate to see how low it will drop.

just think if it did drop to 1 to 1 i could buy the same piece of equipment for R14000 that is a huge saving (R84000)

[Dave A]

Compared to USD, I assume.

My experience is that since 1994 the Rand strengthens slowly and weakens fast, but there isn't much on the short term horison to suggest the current trend will change sharply.

[murdock]

yip the USD

[Dave A]

Well then - if we ever get to R4 to the USD, it's probably still quite a long way away

[dcs]

Hmmm. I reckon that if the USD were to fall against the rand that dramatically then it will fall against other currencies as well. Impact on the cost of the equipment will be inflationary and you may end up paying more in Rands despite advantageous exchange rate. Order it now and fix the price then defer shipment till the USD is really low!

David

[Steven]

I reckon now's a good time to buy ... the rand hasn't been this strong for ages and whilst the upward trend might still continue for a while, over time, it'll probably start slipping again against currencies like the USD, Euro and GBP.

[adrianh]

The goverment will never let the exchange rate drop that low. It would a devistating effect on our exports.

[Martinco]

The goverment will never let the exchange rate drop that low. It would a devistating effect on our exports.

I agree......read the thread on the Reserve Bank and it should be quite clear.

I have a friend that exports 95% of his product and already he is sweating !

Murdock, if you were in the money game then I would say yes but if you do not really specialize in that and you do have the money...........buy the product now ! I have been caught on several occasions and as Dave said, the Rand weakens much quicker than strengthening.