Answer to Question #218731 in Macroeconomics for Thandeka

Question

Use a diagram to illustrate and explain the effect of a political unrest in South Africa on the dollar/rand exchange rate

Answer 1

Because of the political unrest the rand continues losing ground over major currencies including Dollar. i

The Rand lost in excess of about 2% over dollar during mid-morning trade based on the fact that no investor is attracted when there is political. This makes the currency to lose market, hence the value depreciating.