What backs the Rand

Human Action has plotted the assets on the Reserve Bank’s balance sheet (available on SARB website) to show what backs each paper Rand in circulation. As of end-November 2009 foreign exchange reserves account for 75% of total assets, while government debt and other securities, Repos and Gold accounted for the bulk of the rest.

 What Backs the Rand percentages

Of the currency backed by foreign exchange, about 70% is held in dollars, 7% in pounds, and 23% in Euro.  This means that around 50% of the rand is backed by the US dollar. 

Noting the toxic junk that backs the value of each and every US dollar in the world, it is almost certain that a hyperinflation of the US dollar will mean a much higher price of gold in Rand terms. 

 What backs the buck

Comments are closed.