Economics for Sa

Topics: Foreign exchange market, Current account, Balance of payments Pages: 19 (5184 words) Published: August 26, 2013
ECONOMICS ASSIGNMENT: THE BUSINESS ENVIRONMENT

ECONOMICS ASSIGNMENT: THE BUSINESS ENVIRONMENT
Compiled by SYNDICATE 8 [ALPHAS]
Denishree Naidoo Marcus Gericke Adrian Pillay Tumi Mdudli Tina Sefotlhelo • Ontiretse Modise • • • • •

ECONOMICS ASSIGNMENT : THE BUSINESS ENVIRONMENT

TABLE OF CONTENTS
1. INTRODUCTION:......................................................................................................................................................1

2. FACTORS INFLUENCING THE SUPPLY AND DEMAND OF CURRENCIES .......................................................................1 2.1 Currency Appreciation and Depreciation .................................................................................................................2 2.1.1 The DEMAND for South African ZARs in the United States ...........................................................................2 2.1.2 The SUPPLY of USD in South Africa ................................................................................................................ 2 2.2 The Balance of Payments ......................................................................................................................................2 2.2.1 Net Capital Flows ...........................................................................................................................................3 2.2.2 South Africa’s Current Account Deficit ..........................................................................................................3 3. DEVELOPMENTS OBSERVED IN THE FOREIGN EXCHANGE MARKETS.........................................................................3 3.1 Impact on South Africa’s Balance of Payments ....................................................................................................5 3.2 Impact of the Exchange Rate on different Spheres of the SA economy...............................................................5 3.2.1 Business .........................................................................................................................................................5 3.2.2 Government ...................................................................................................................................................6 3.2.3 Households ....................................................................................................................................................7 4. THE IMPACT OF CURRENCY FLUCTUATIONS ON A SA BUSINESS ...........................................................................9 4.1 Import side ............................................................................................................................................................9 4.2 Exports side ...........................................................................................................................................................9 4.3 Strategies to reduce the impact of the volatile Rand ...........................................................................................9 5. CONCLUSION:............................................................................................................................................................10 APPENDIX ......................................................................................................................................................................11 DEFINITIONS .................................................................................................................................................................14 REFERENCES ..................................................................................................................................................................15

[SYNDICATE 8 : ALPHAS]

ECONOMICS ASSIGNMENT: THE BUSINESS ENVIRONMENT

1. INTRODUCTION: South Africa, with its young democracy and as a developing country, is part of a global competitive...

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Bearce, D
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Berkeley, U.C. (2011,11,28).Economics 1 - Lecture 23: Exchange Rates and Balance of Payments [Webcast]. Retrieved from http://www.youtube.com/watch?v=_KljHF8nn-U
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