The South African rand (ZAR), symbolized as "R", is the official currency of South Africa. Each rand is divided into 100 cents. The name "rand" is derived from the Witwatersrand, the ridge where Johannesburg is located and where much of South Africa's gold deposits were found.
The South African Reserve Bank (SARB) has the exclusive authority to issue coins and banknotes in the country. The South African rand is also legal tender in the Common Monetary Area (CMA) member states of Namibia, Lesotho, and Eswatini.
South African 200-rand banknote (front side). Courtesy of Ron Wiserand, monetary unit of South Africa. Each rand is divided into 100 cents.
History of the South African Rand
The rand was introduced in the Union of South Africa in 1961, three months before the country declared itself a republic. It replaced the South African pound as legal tender, at a rate of 2 rand to 1 pound, or 10 shillings to the rand.
A Decimal Coinage Commission had been set up in 1956 to consider a move away from the denominations of pounds, shillings, and pence; it submitted its recommendations on 8 August 1958.
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By the early 1980s, high inflation, mounting political pressure, and sanctions placed against the country due to international opposition to the apartheid system had started to erode its value. The dollar became stronger than the South African currency for the first time on 15 March 1982.
Its value thereafter fluctuated as various exchange rate dispensations were implemented by the South African authorities.
A host of local and international events influenced the currency after that, most notably the 1994 general election, which had it weaken to over R3.60 to the dollar; the election of Tito Mboweni as the governor of the South African Reserve Bank; and the inauguration of President Thabo Mbeki in 1999, which had it quickly slide to over R6 to the dollar.
This sudden depreciation in 2001 led to a formal investigation and a dramatic recovery. By the end of 2002, the currency was trading under R9 for the dollar again, and by the end of 2004, it was trading under R5.70. The currency softened somewhat in 2005, trading around R6.35 to the dollar at the end of the year. At the start of 2006, however, the currency resumed its rally and, on 19 January 2006, was trading under R6 to the dollar again.
From 9 to 13 December 2015, over four days, the rand dropped over 10% due to what some suspected was President Jacob Zuma's surprise announcement that he would be replacing the Finance Minister Nhlanhla Nene with the little-known David van Rooyen. The rapid decline in value stemmed from when Zuma backtracked and announced that the better-known previous Minister of Finance, Pravin Gordhan, would instead be appointed to the post.
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In April 2017, a Reuters poll estimated that the rand would remain relatively stable for the rest of the year, as two polls found that analysts had already factored in a possible downgrade to "junk" status.
After President Jacob Zuma narrowly won a motion of no confidence in South Africa in August 2017, the rand continued to slide, dropping 1.7% that same day.
In September 2017, Goldman Sachs said that the debt and corruption of Eskom Holdings was the biggest risk to South Africa's economy and the exchange rate of the rand.
In October 2017, the rand firmed against the US dollar as it recovered from a six-month low.
Coins of the South African Rand
Coins were introduced in 1961 in denominations of 1⁄2, 1, 2+1⁄2, 5, 10, 20, and 50 cents. In 1965, the introduction of 2-cent coins replaced the 2+1⁄2 cent coins. The 1⁄2 cent coin was last struck for circulation in 1973. The 1 rand coin for circulation was introduced in 1967, followed by 2 rand coins in 1989 and 5 rand coins in 1994.
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To curb counterfeiting, a new 5-rand coin was released in August 2004. On 3 May 2023, the South African Reserve Bank announced that a new series of coins would be released. These will have the same denominations as the previous series.
From the year 2000, coins started to feature South Africa's new coat of arms. The 1 cent and 2 cent coins stopped being made at the end of March 2002. The 5 cent coin stopped being made on April 1, 2012. The 10 cent coin, which used to be bronze-plated steel, is now made of copper-plated steel. Even though 5 cent coins are still legal, they are rarely seen.
In 2004, a new R5 coin was introduced. It was a bi-metallic coin, meaning it was made of two different metals.
The gold Krugerrand coin is still made in different sizes: 1/10 oz, 1/4 oz, 1/2 oz, and 1 oz. In 2017, a silver Krugerrand was made for the first time to celebrate 50 years of the Krugerrand. The 2017 silver Krugerrand had a special message on it.
South Africa has also released special commemorative 5 rand coins. In 2015, a coin marked 200 years since the Griqua coinage, which was the first money made in South Africa. In 2017, a coin honored the Order of the Companions of O.R.
As of 2022, no new regular coins have been made since 2019.
Banknotes of the South African Rand
The first series of rand banknotes was introduced in 1961 in denominations of 1, 2, 10, and 20 rand, with similar designs and colours to the preceding pound notes to ease the transition. They bore the image of what was believed at the time to be Jan van Riebeeck, the first VOC administrator of Cape Town.
In 1966, a second series of banknotes with designs that moved away from the previous pound notes was released. Notes with 1, 5, and 10 rand denominations were produced with predominantly one colour per note. A smaller 1 rand note with the same design was introduced in 1973, and a 2 rand note was introduced in 1974. The 20 rand denomination from the first series was discontinued.
The 1978 series started with denominations of 2, 5, 10, and 20 rand, with a 50 rand introduced in 1984. This series had only one language variant for each denomination of note. The 2, 10, and 50 rand had Afrikaans first, while the 5 and 20 rand had English first.
During the 1990s, the banknotes were redesigned to feature images of the Big Five wildlife species. 10, 20, and 50 rand notes were introduced in 1992 & 1993, retaining the colour scheme of the previous issue.
The 2005 series has the same principal design but with additional security features, such as colour-shifting ink on the 50 rand and higher and the EURion constellation.
In 2011, the South African Reserve Bank issued defective 100 rand banknotes that lacked fluorescent printing visible under UV light.
On 18 July 2018, a special commemorative series of banknotes was released in commemoration of the 100th anniversary of Nelson Mandela's birth. This series includes notes of all denominations: 10, 20, 50, 100, and 200 rand. These notes circulate alongside the existing notes.
The notes depict the standard face of Nelson Mandela on the obverse. Still, instead of the Big Five animals on the reverse, they show a younger Mandela with different iconic scenes relating to his legacy.
Secrets of the South African Rand
Tips for Exchanging Currency in South Africa
Exchanging for South African money is straightforward once you are in the country.
- One of the keys to getting a better exchange rate is to research and compare rates across multiple services. As a free-floating currency, the rand’s value changes daily.
- To ensure you can use your debit card and bank account freely in South Africa, notify your bank of your travel plans. Depending on your bank, you may be able to set a travel notification online or through your mobile banking app.
- Airports and hotels are convenient locations to change money in South Africa, but they typically offer less-than-favorable exchange rates. Black-market money exchangers operate widely in tourist areas of South Africa (and many other countries).
- Currency exchange services may charge various fees. These include flat transaction fees, commissions, and international service charges. Catch hidden fees by asking your money exchanger to list their service fees. With Western Union, you’ll never be surprised by hidden fees when exchanging money.
- ATMs can be a convenient way to exchange currency in South Africa. Opting to pay in the South African currency provides a better exchange rate and helps avoid additional fees associated with dynamic currency conversion (DCC).
- There are plenty of places to exchange money in South Africa between banks, ATMs, and foreign exchange bureaus. You might be tempted to get some of South Africa’s currency before you leave the US, but it’s better to wait until you arrive in South Africa.
- When converting dollars for South African money, do your best to avoid unlicensed money exchangers. Instead, use only official banks or licensed exchange bureaus. When transacting online, find an exchange provider with the highest security standards, like data encryption and Payment Card Industry Data Security Standard (PCI DSS) compliance.
Before you travel to South Africa, it’s a good idea to know what to expect when tipping, using other currencies in the country, and more. Most places in South Africa don’t accept US dollars.
One area where tipping is different in South Africa than in other countries is at gas stations. When getting gas, attendants fill your tank, wipe your windows, and sometimes even check your tire pressure. While you may be able to tip on a credit or debit card, service workers prefer cash tips.
Major banks, airports, exchange bureaus, and ATMs across the country offer South African currency. Another option is to exchange for rand using a reputable service.
Exchange Rates of the South African Rand
The value of the South African Rand has fluctuated significantly over the years. Here's a brief overview of its performance against the US dollar:
| Year | Rand per USD |
|---|---|
| 1982 | ~R1 |
| 1985 | ~R2.40 |
| 1992 | ~R3 |
| 1994 | ~R3.60 |
| 1999 | ~R6 |
| 2002 | ~R9 |
| 2004 | ~R5.70 |
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