South African Rand: Towards a Status of Regional Currency

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DOI: 10.20542/0131-2227-2017-61-8-48-56

M. Zharikov (michalzharikoff@gmail.com), 
Moscow Technological Institute, 38a, Leninskii Prosp., Moscow, 119334, Russian Federation;
Russian Customs Academy, 4, Komsomol’skii Prosp., Luybertsy (Moscow Region), 140009, Russian Federation 

Acknowledgement. The research was supported by the Russian Foundation of Fundamental Research, project “Theoretical and methodological foundations of the strategy of inclusive development of Russia’s economy” 17-02-00040 “”.


Abstract. The relatedness of the article is determined by the developments in the world system of currencies occurred in 2014–2016, i.e. the establishment of the BRICS Development Bank and the inclusion of Chinese Yuan into the SDR currency basket. Author explores the potential of South African Rand to become a regional currency and, eventually, an international one thanks to the cooperation within the BRICS in the spheres of the international trade and foreign exchange. The expertise of South African Republic in gradual liberalization of foreign exchange restrictions and internationalization of national currency Rand is laid out. Direct trade in South African Rands is regarded as a provisional stage for its wider use in regional trade. The author attempts to calculate the potential benefits of direct trade in Rands in the Southern region of Africa. The potential amount of Rands that could be traded on the foreign exchanges of South Africa and Botswana (as a result of direct exports and imports between them) is a major indicator for the South African government while taking decision concerning the scope of the Rand’s internationalization under the existent gradualist policy. The author considers a hypothetical scenario according to which direct trade in goods and services and cross-border trade in Rands between South Africa and Botswana can trigger the process of the latter’s integration into the Southern African United Currency Zone. This can become an important factor of Rand’s strengthening as a regional currency and, eventually, its transformation into an international one. In conclusion, the author makes forecasts as to further developments in Botswana’s foreign trade with China in case of its inclusion into the Rand zone. 

Keywords: Rand, foreign exchange restrictions, currency union, external economic settlements, South African Republic, Botswana, BRICS 


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For citation:
Zharikov M. South African Rand: Towards a Status of Regional Currency. World Eonomy and International Relations, 2017, vol. 61, no. 8, pp. 48-56. https://doi.org/10.20542/0131-2227-2017-61-8-48-56



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