Despite the global Covid-19 pandemic and the #BlackLivesMatter anger and protests‚ the US dollar seems to remain relatively stable.
This cannot be said for the South African rand‚ however‚ which has lost around 35% of its value since the start of 2020. SA’s currency has breached R19 to the dollar‚ putting the country in a tight position.
In an explainer‚ Business Day reporter Mudiwa Gavaza looks at why some currencies around the globe are hit harder than others during global crises.
The US dollar was crowned the world’s reserve currency in the 1940s‚ backed by the world’s largest gold reserves. Other countries accumulated reserves of US dollars‚ instead of gold reserves. This has had a major impact on why it has been able to remain firm as the top currency.
Source: ARENA Holdings.