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Essay / Research Paper Abstract
During 2001 the South African collapsed, with no logical or immediately apparent reason. This 5 page paper argues that there were many smaller causes that contributed to the fall, but that the overall cause was the lack of confidence in the government and the perception of inefficient economic management. This is supported by the recovery that was accompanied by stronger and more visible economic policies during 2002. The bibliography cites 3 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TESArand.rtf
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Unformatted sample text from the term paper:
policy as well and management of the economy as well as more direct influences such as interest rates. One currency which demonstrates this very clearly is the South African Rand
with the fall of 2001 appearing to be contradictory to the economic position of the time, the explanation is often thought to be political rather than economic. In this paper
the reason for the fall in the Rand during 2001 will be examined. In 2001 the Rand was the poorest performing currency against the US dollar (Uhlfelder 24). In that
one year it fell 60% against the US dollar (Uhlfelder 24), and at the weakest it traded at 13.85 Rand to the dollar, which occurred in December 2001 (Commey 29)
The usual scenario for a currency falling in value will be due to a decrease in demand, often due to the economic position, such as high inflation (as seen with
purchasing parity models), or general poor economic performance (Howells 22). However, looking at South Africa in the period before and during the fall this does not appear to be the
case. South Africa is not generally a country that has high levels of volatility, it is not a currency in which speculators are heavily involved, as opposed to tome of
the Asian currencies, such as the Yen. The general position was a positive one, the markets were relatively open, and the five
years between 1995 and 2000 saw steady growth, the fix capital increased by an average of 3.8% per year and real growth in the GDP averaged 2.7% (Uhlfelder 24). The
formerly problematic inflation had also been brought under control to under 6%, the defiant in the current account was improving, at US$2.27 billion in 1997 by 2000 it was down
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