scholarly journals Testing for explosive bubbles in the South African-US exchange rate using the sequential ADF procedures

2017 ◽  
Vol 12 (1) ◽  
pp. 105-112
Author(s):  
Uchenna Elike ◽  
Emmanuel Anoruo
Keyword(s):  
Exchange Rate ◽  
South African ◽  
The South ◽  
Dollar Exchange Rate ◽  
Relative Prices ◽  
Speculative Bubbles ◽  
Rational Bubbles ◽  
Traded Goods ◽  
Time Period ◽  
South African Rand

This paper tests for the existence of speculative bubbles in the South African-US exchange rate using the sequential ADF procedures. In particular, the paper uses the SADF and GSADF right-tailed unit root tests to explore the existence of explosive bubbles in the South African-US exchange rate for the time period running from January1980 through July 2012. The results provide evidence in support of the existence of explosive bubbles in the nominal rand-dollar exchange rate, the real exchange rate of traded and non-traded goods. The explosive behavior exhibited by the South African rand-US dollar exchange rate can be interpreted as evidence of rational bubbles given that this behavior is driven by the fundamentals including relative prices of traded and non-traded goods.

scholarly journals Covered interest arbitrage opportunities in the South African foreign exchange market

1987 ◽  
Vol 18 (4) ◽  
pp. 209-214
Author(s):  
C. De J. Correia ◽  
R. F. Knight
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
South African ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Exchange Market ◽  
The South ◽  
Dollar Exchange Rate ◽  
Interest Parity ◽  
Interest Differential

The Interest Parity Theory states that in an efficient market, any interest differential between local and foreign sources of finance will be offset by the forward premium/discount. Therefore, opportunities to engage in profitable Covered Interest Arbitrage transactions will be eliminated quickly. The fall in the Rand/Dollar exchange rate resulted in many South African companies reporting substantial foreign exchange losses on offshore loans. Companies were attracted to foreign sources of finance because of lower foreign interest rates. The authors conclude, on the basis of empirical tests, that the forward Rand/Dollar exchange rate followed its interest parity value very closely over the period August 1983 - August 1985. Opportunities to engage in risk-free arbitrage activities were offset by related transaction costs. The South African foreign exchange market is efficient to the extent that risk-free profit opportunities did not exist for the period under review and therefore there was no benefit, after adjusting for risk, for South African management to borrow from offshore sources of finance.

Eswatini (formerly Swaziland)

2020 ◽  
Author(s):  
Marius Schneider ◽  
Vanessa Ferguson
Keyword(s):  
South Africa ◽  
Exchange Rate ◽  
South African ◽  
Southern Africa ◽  
The South ◽  
The Common ◽  
One To One ◽  
South African Rand

Eswatini, formally known as the Kingdom of Eswatini, is a landlocked country in Southern Africa and one of the smallest countries in Africa with a total area of 17,364 square kilometres (km) and a population of 1,367 (2017). It is bordered by Mozambique and South Africa. The capital and main business centre of Eswatini is Mbabane. The working week is from Monday to Friday from 0800 to 1300 and 1400 to 1700. The Swaziland Lilangeni (SZL/ E) is the official currency of Eswatini. The Lilangeni was introduced in 1974 to compete with the South African rand through the Common Monetary Area, to which it remains tied at a one-to-one exchange rate.

Lesotho

2020 ◽  
Author(s):  
Marius Schneider ◽  
Vanessa Ferguson
Keyword(s):  
South Africa ◽  
Exchange Rate ◽  
South African ◽  
Total Population ◽  
Capital City ◽  
The South ◽  
British Colony ◽  
Growing Economy ◽  
The City ◽  
South African Rand

The Kingdom of Lesotho is a landlocked country within the borders of South Africa. Lesotho, previously known as Basutoland, was a British colony from 1959 until it gained its independence from Britain on 4 October 1966, after which it became formally known as The Kingdom of Lesotho. Lesotho covers an area of 30,355 square kilometres (km), with a total population of 2,285,604. The capital city is Maseru, which lies directly on the border with South Africa, with a population of 330,760. Maseru has a rapidly growing economy as a result of industrial trade, foreign and local investment in the city. Other main cities, although substantially smaller than Maseru include Teyateyaneng, Mafetang, and Hlotse. The working week is from Monday to Friday from 0900 to 1245 and from 1400 until 1630. The currency in Lesotho is the Maloti (M), which is used alongside the South African rand (ZAR), with the Maloti currently being at the same exchange rate to the South African rand.

scholarly journals An empirical investigation into the correlation between rand currency indices and changing gold prices

2011 ◽  
Vol 9 (1) ◽  
pp. 172-183
Author(s):  
F.Y. Jordaan ◽  
J.H. Van Rooyen
Keyword(s):  
South African ◽  
Empirical Investigation ◽  
Gold Price ◽  
The South ◽  
Price Changes ◽  
The Relationship ◽  
Research Period ◽  
South African Rand

This study sets out to investigate the relationship between two South African Rand currency indices, ZARX and RAIN, in relation to the gold prices. The ZARX is computed with the formula used to determine the USD currency index (USDX) with the latter being developed by the JSE. Albeit sets of variables have been investigated to determine if any long term relationships exist using the theory of co-integration. The findings suggest that there is no co-integrating relationship between the South African Rand currency indices and the gold price changes over the research period.

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