What will the rand do? Who else is panicking...?

[Bob]

The day to day values of the Rand is pretty much guesswork, but over the long term, you can safely bet that if inflation and interest rates are higher in South Africa than Australia, the value of the Rand will be slowly eroded away to those currencies with low to zero inflation and interest rates.

The factor of .76 is used in doubling a currency's worth over time.

If the Rand's inflation rate is running at 9.5%, say, the divide 9.5 into 76. It will go eight times.

This means that if inflation pushes prices up at a steady rate of 9.5% every year, then in eight years prices will be double to what they are today.

You can also assume that a currency like the Swiss Franc with very low inflation and interest rates close to zero, will be worth twice the value of the Rand in eight years' time because prices in Swiss Francs won't have gone up much in Switzerland, yet household prices will have doubled in South Africa over that time.

Australia's inflation rate is running between 2% and 3% each year with interest rates paid into savings accounts at the bank about the same.

Compare that to South Africa to see roughly how much the Rand is losing in value each year compared to the value of the Aussie $ and prices Down Under.