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Discussion Starter · #1 ·
Hi Members,

Good day. This is my first post in the forum.

As Expats we all must be worried about depreciating Rand/Zar. It takes a big cut from our savings, would like your comments/thoughts about the future of rand.
Has it stabilized now or can we expect it to fall further?

Regards.
 

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Move your savings off shore ASAP, this has been the advice of knowledgeable people for a while. The country is seriously in debt and will struggle to make ends meet within the next two years and will have to ask for help from the International Monetary Fund, at that point the rand will fall even further than it is now. You have nothing to lose by getting your money out but everything to lose if you don't.
 

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Inflation Big Mac index

My first post... :)

I watch the Rand closely since I live here (2002) and my "basic" exchange rate comparisons look like this: The Euro was 7:1 in 2005, a night at the Road Lodge was R180. Inflation in Europe was 16% for 10 years - combined.

In 2015 the Euro is about 14:1, a night at the Road Lodge is over R500. Prices in SA, in ZAR tripled for many products (even though inflation was 60%), based on over-inflation. If you rent a place you sign up for 10% rental increase per year. 6 years later it's double.

I used easy exchange rates, you can find accurate ones on the web.

If accomodation was as affordable today as it was in 2005 the ZAR to Euro exchange rate would be gravitating towards 20:1, the GBP 25:1. Or worse...

Am I making sense? And now take SA's downgrading at Moody's in account.
 

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My first post... :)

I watch the Rand closely since I live here (2002) and my "basic" exchange rate comparisons look like this: The Euro was 7:1 in 2005, a night at the Road Lodge was R180. Inflation in Europe was 16% for 10 years - combined.

In 2015 the Euro is about 14:1, a night at the Road Lodge is over R500. Prices in SA, in ZAR tripled for many products (even though inflation was 60%), based on over-inflation. If you rent a place you sign up for 10% rental increase per year. 6 years later it's double.

I used easy exchange rates, you can find accurate ones on the web.

If accomodation was as affordable today as it was in 2005 the ZAR to Euro exchange rate would be gravitating towards 20:1, the GBP 25:1. Or worse...

Am I making sense? And now take SA's downgrading at Moody's in account.
I have been following the Rand for a while, not quite as long SA Feather. For those that earn Dollars/Euros/Pounds we are able to have a nice vacation. But those in South Africa really struggle to have a nice holiday.

I remember the first time I went to South Africa the Rand 5:1 now it been hovering around 12:5. It's really no telling where it's going to go in the next couple of years.
 

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Discussion Starter · #5 ·
Thanks for responses.
That begs the question if its worth migrating to SA given the Rand volatility and weakness. Do you think the currency depreciation could get negated by better salaries? (This is assuming your primary goal of migrating was to save money rather than lifestyle etc)

Is there any way we could hedge against weak rand? (Apart from transferring funds offshore regularly)
 

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South Africans living in south Africa don't feel the weakness of their money or that they are struggling, most of them are living a well off life because they are not dependent on international products. As a foreigner we will not get a job with the same salary that we are earning outside of south Africa and most high paying jobs go to south Africans. Even if we get a "high paying" job in south Africa and go on vacation in countries with dollars and euros we would still feel quite poor there. To live a good life in south Africa you have to work and spend there as soon as you take your money out it becomes little.
 

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Thanks for responses.
That begs the question if its worth migrating to SA given the Rand volatility and weakness. Do you think the currency depreciation could get negated by better salaries? (This is assuming your primary goal of migrating was to save money rather than lifestyle etc)

Is there any way we could hedge against weak rand? (Apart from transferring funds offshore regularly)
I don't think this is a reason at all to move. Maybe to take a holiday, but not move. The cost of living has gone up by leaps and bounds. Housing, fuel, electrcity, food. The average South African is struggling.
 

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I agree, come visit and experience the friendly people and beautiful land. SA needs more tourists. The numbers dropped drastically since the new immigation rules.

Tourists can typically adapt better to power cuts... Have a pick nick with cold drinks with ice bought from the petrol station ("Garage", as we say)
 

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We came here to earn and save money, quite honestly I am earning almost the same than I would earn if I were home-not to mention having to deal with DHA, visa applications etc. We're thinking about relocating
 

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Discussion Starter · #13 ·
We came here to earn and save money, quite honestly I am earning almost the same than I would earn if I were home-not to mention having to deal with DHA, visa applications etc. We're thinking about relocating
Absolutely, you forgot to mention load shedding, water shedding and forthcoming hike in food prices, inflation...
gosh this is not looking good...
 

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As far as possible, keep money offshore - if you are a foreigner working here you are able to remit earnings abroad, I would suggest you send some of your earnings to an offshore account (banks offer this facility too).
 

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Whatever you do, don't invest in property.

I have the proceeds of a recent property sale in my FNB account, and in the past few days the value has gone from +- USD 70,000 to +- USD 53,000

The property sold for 2 to 3 times the original purchase price, but converting to a first world currency it turns out to be a disastrous loss.
 

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Agree to most of you , seems the decision to move SA is not in my favor.
Monthly savings in Home currency is already down by 20% :-(
 
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As far as possible, keep money offshore - if you are a foreigner working here you are able to remit earnings abroad, I would suggest you send some of your earnings to an offshore account (banks offer this facility too).

It is very scary every single day the rand is dropping in value...If this is due to an immigration law surely this should be fixed..Not looking good for us who want to save money.

Hi dave
how does an offshore account work? what is required to open one?
 

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Just like what happened in Zimbabwe, Zuma and his cronies will make no effort to instil investor confidence if it has the potential of harming their quest to hold onto power in the upcoming elections.
 
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