The sharp decline in the value of the rand is a mixed blessing for farmers. The value of the rand plummeted during the past week and reached R14,00 per US$ in interday trading. It has since recovered to R13,20 but remains extremely volatile. A weaker currency provides protection against lower-priced imports, as a 50-cent decrease in the value of the rand increases import parity by about 15 cent per litre. A weaker rand will, however, also increase inflationary pressure, which will probably result in further increases in the interest rate. In addition, it isolates us from the benefits of a lower oil price and causes higher grain prices.
Published on Monday, 31st August 2015 - 10:21
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