South Africa Unstable Over Russia-Ukraine Commotion, As Rand Loses Strength

MDT Editors

With the US now accusing South Africa of providing ammunition to Russia, we’ve officially been thrown into something comparable with the Cold War setting of the middle to late 20th century.

Many African nations that gained their independence after World War II were thrust into this world, where you were forced to decide if you were with the West or the communists in the East.

Communism may be its nadir, but there’s still a choice that will have to be made. 

South Africa, as one of the most industrialised emerging market nations and with its highly liquid currency in the rand, will be increasingly pushed to take a stand.

The weakness of the rand this week is testament to this. Its decline — and if it’s sustained — will only add further pressure to consumers, while exporters will smile in the short term, because their goods are priced in dollars and their costs in a weakening rand.

Over the medium and longer term, miners and our other exporters will feel the pinch of a weak currency when the cost of machinery they import will keep on climbing.

This is the pressure that is being brought to bear now. It will only get worse in the weeks and months to come as we await the arrival of the Russian Tsar. 

The sovereignty will be tested