Currency Crises in South Africa

The currency crisis in South Africa is a crisis that attracted the attention of the whole world. Of particular interest were the currency crises that occurred in 1996, 1998 and 2001. Many scholars attributed this episode to extremely abrupt changes in the structure of the volatility of the foreign exchange market. This currency crises episode in South Africa was a wake up call to other countries to also be on the look out lest they should also find themselves in the same situation. Scholars both within and without south Africa felt that they needed to study it with keen attention to every details so that they could pick vital lessons that would be used in future or in other countries. To learn more about currency crisis and international foreign exchange rates and trading, read more here: http://fxforex.nl/

One of the key defining things that are thought to have contributed heavily to the currency crises in South Africa was the increase in market uncertainty. These crises are characterized by a period of unusually high levels of volatility in . Researchers have discovered that they can determine the exact dates of when the currency crisis starts and when it is expected to end. This can be done when they deliberately study volatility dynamics changes over a short-term period of time as compared to a complete focus on long-term volatility dynamics changes.

Despite the fact that the South Africa’s rand suffered other bouts of currency crises between 1994 and 2009, at this point the country was more prepared than during the previous ones. There were various measures that had been put in place to ensure that early detection of the possible volatility in the South Africa’s rand is made. Scholars had devised a formula that would help them work it out besides carrying out short-term studies on the volatility of the currency. This perhaps explains why there has been minimal currency crisis in South Africa ever since.