Volatility of The Real Exchange Rate of The Rand: 1990 – 2004

This working paper serves as a preliminary study of the volatility of the rand. Before the effects of changes in the rand exchange rate on the economy can be studied, it must first be established more accurately what the nature of these changes are. This working paper studies four main related aspects: the level of the real effective exchange rate of the rand; the volatility of the exchange rate; reasons for the observed volatility and protection against such volatility. The methodology of the study is based on a non-econometric qualitative analysis of these issues.