Countries Using South African Rand

South African Rand which is widely known as ‘ZAR’ is the legal currency of South Africa. This is one of the widely used currencies in the African continent. Other than in South Africa, the currency is used in other nations that including Namibia, Lesotho, and Eswatini.

Definition of Currency

A currency is a standardized and acceptable form of money in circulation which is used as the medium of exchange. Banknotes and coins are examples of currency that are usually issued by the central bank of a country. Most of the countries have their own currencies.

Denominations

Like other dollar-denominated currencies, the South African Rand is divided into 100 cents and all South African coins and banknotes are issued by the South African Reserve Bank which is the central bank of the country. The currency is widely in use in the economy of South Africa. The coin denominations of the currency include, 10c, 20c, 50c, R 1, R 2, R 5, Krugerrand, and the banknotes include, R 10, R 20, R 50, R 100, and R 200.

History of South African Rand

Rand, which is the legal tender of South Africa and many other neighboring countries, got its name from the word ‘Witwatersrand’ which means Ridge in white water. The ‘rand’ is an African and Dutch word, generally used for describing a long, narrow hilltop mountain range or a watershed. The South African Rand is also known as ZAR, which stands for an abbreviation of the Dutch word Zuid-Afrikaanse Rand.

On June 30, 1921, the South African Reserve Bank began operations, allowing the country to establish a national bank. This bank released its first banknotes on April 19, 1922.

The Union of South Africa adopted Rand as its currency in 1961. Earlier, the people of South Africa used the South African Pound as their legal tender. While adopting this new form of currency, they had considered half of a pound to be equivalent to that of a single rand.

After this time, the South African Rand had started fluctuating, considering the economic situation of the country at that point of time. However, it has managed to remain worth more than the dollar, but it began to fall as a result of international pressure, as well as sanctions imposed on the country as a result of South Africa’s apartheid stance.

In order to honor the Nobel laureate’s efforts in promoting peace in the country, the South African Reserve Bank issued a series of banknotes with Nelson Mandela’s visage in 2012.

Use of South African Rand in Other Countries

The South African rand or ZAR is used by several nations and neighboring countries of South Africa. The member nations of the Common Monetary Area, which includes Namibia, Lesotho, and Eswatini use ZAR prominently. Though each of these countries has its national currency (the dollar, loti, and lilangeni, respectively) that is linked to the rand at parity and is commonly recognized as a replacement. The Rand was also legal money in Botswana until 1976 when it was replaced at par by the pula.

Conclusion

It’s quite common for any currency to face the ups and downs with the overall performance of the country’s economy. And the same applies to ZAR as well, the currency has seen a lot of fluctuations in the past years and might see more in the days ahead. Ultimately what matters is the key decisions coming from Cyril Ramaphosa, the President of South Africa, and his government. The president himself comes from a business background, and the country can surely expect few growth opportunities in his tenure.