Emerging market jitters that have thrust India, Indonesia, Thailand and Brazil into the news lately have been battering South Africa as well. Stagflation is a very real concern there—growth is anemic and inflation is high. The rand has been one of the worst-performing emerging market currencies this year, and it has fallen to four-year lows in the past week, trading below R10 against the dollar.Furthermore, it is likely to stay that way for the time being:
…Pravin Gordhan, South Africa’s finance minister, told the Financial Times that the government recognises it does not have the means to intervene. He cited intervention in the foreign exchange market in the 1990s that supported the rand and cost the central bank more than $20bn.“We recognise we don’t really have the capability to do that but we will take this on a contingent basis,” he said. “We’ll take each day as it comes and then find the appropriate responses to whatever the ramifications are.”
Given the wealth gap and persistently high unemployment, this is not what the country needs right now.But for Americans thinking about the trip of a lifetime, however, the news is that one of the world’s most beautiful and fascinating destinations is now on sale.