South Africa President Says US Tapering Has Hurt ZAR

February 27, 2014 Share Print 0

South Africa’s currency has taken a beating amid the latest bout of emerging market turmoil, but the country’s President Jacob Zuma told CNBC the rand’s volatility was all down to the U.S. dollar.

The U.S. Federal Reserve’s decision to cut back its stimulus program has sparked a sharp sell-off in emerging market currencies. The South African rand, which lost 18 percent last year, endured a fresh bout of pain in 2014, falling to a five-year low in January despite the South African central bank hiking rates by 50 basis points to 5.5 percent.

“It’s not because of our currency, it’s because of the dollar,” Jacob Zuma told CNBC Africa on Wednesday.

“The dollar, that is the key controlling currency in the world. Once the dollar has problems, many currencies are having problems…. the fact that we had the economy melting down is because of the dollar,” he added.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.