South Africans have been buzzing about the rand manipulation story lately — and for good reason. Between court cases, bold headlines, and talk that the rand “should actually be R7 to the dollar,” it’s hard to know what’s fact, what’s theory, and what’s just frustration.
Let’s break it all down in simple terms.
The Competition Commission of South Africa (CC) has accused several major local and international banks of colluding to influence the USD/ZAR exchange rate — the rate that tells us how many rands you need to buy one U.S. dollar.
The allegations include traders coordinating bids and sharing confidential pricing information between roughly 2007 and 2013. These cases have been moving through the courts for years, and while nothing has been proven yet, the investigations have raised big questions about how fair the foreign exchange (forex) market really is.
Some banks argue that South Africa’s authorities don’t have jurisdiction over foreign traders — while the CC insists that manipulation of the rand hurts all South Africans. The case even reached the Constitutional Court, showing how serious this issue has become.
This is where things get interesting — and a little misunderstood.
Economists use a measure called purchasing power parity (PPP) to estimate what a currency “should” be worth based on the cost of goods and services in different countries. In theory, if something costs the same in dollars and rands after conversion, the currency is fairly valued.
According to some PPP models, the rand is deeply undervalued — suggesting that it should be around R7 per US dollar, not R18 or R19 like it’s been recently.
But here’s the catch: PPP is theoretical. It doesn’t take into account investor risk, government debt, energy issues, or politics — all of which affect the real market exchange rate. So while the R7 figure grabs attention, it’s more an ideal benchmark than a real-world target.
There are a few key reasons why the rand trades much lower than PPP suggests:
The Competition Commission continues to investigate and prosecute the banks involved. If manipulation is proven, heavy fines and stricter regulations could follow. This would help restore trust and transparency in how the rand is traded globally.
The South African Reserve Bank (SARB) and the National Treasury are focused on keeping interest rates stable to control inflation, managing foreign exchange reserves, and maintaining credibility in financial markets.
Confidence is key — when investors trust the system, the rand benefits.
To truly close the gap between what the rand is and what it should be, South Africa needs to improve productivity, fix power and logistics issues, grow exports, and maintain political and fiscal stability.
These are long-term moves, but they’re what ultimately make a currency stronger.
Realistically — not anytime soon. For the rand to reach R7 to the dollar again, South Africa would need major foreign investment inflows, a booming, stable economy, and a huge increase in global confidence.
That doesn’t mean it’s impossible — it just means the journey starts with fixing fundamentals, not chasing a number.
A weaker rand makes imports more expensive, pushes fuel and food prices up, and can lead to higher inflation. For small businesses, it affects product costs, profit margins, and planning.
For the average person, it shapes the price of everything — from flights to groceries. So, yes — rand manipulation and undervaluation aren’t just “finance talk.” They hit real lives and real wallets.
The rand manipulation case is about alleged illegal collusion, not proof that anyone can permanently control the currency. The R7 to the dollar idea is a theoretical model, not a policy goal. Real change will come from transparency, confidence, and reform — not quick fixes.
The stronger South Africa becomes economically, the closer the rand will move toward its fair value — whatever number that may be.
✨ Final Thought:
Confidence builds strength — in economies, currencies, and people. And just like in business, restoring trust in the system takes consistency, honesty, and time.