THE RAND, which has been
trading strongly all year, dipped
to its weakest 2018 trading
level of R13,86 to the dollar on
June 19.
But while under President Jacob
Zuma’s rule, travel trade regularly
reported rushes of clients making
payment for holidays in depreciation
cycles, the trade are seeing a
more stable reaction this time
round, possibly indicating greater
confidence in the currency’s ability
to re-stabilise under President Cyril
Ramaphosa’s rule.
The current trading levels have not
been seen since November 2017,
prior to President Ramaphosa’s
election as ANC president.
However, the rand has depreciated
significantly in the last month from
R12,40 to the dollar on May 24 to
just under R14 in June.
Giles Clinton, director of Checkout
Travel, said that despite the
massive fluctuation in June, he had
not seen clients rushing to make
payment. He said local sentiment
was that South Africa was in a more
positive place politically and the
currency would stabilise again in
time.
He predicted that sales would
continue to grow conservatively for
the remainder of 2018, despite the
recent depreciation.
“We are still seeing a good
number of quotes coming through
and it would seem as though
passengers are still looking at
travelling,” said Megan D’Arcy,
product manager international for
kulula holidays. “Historically, South
Africans have always been quite
resilient to our currency’s volatility.”
However, while trade aren’t
reporting a change in booking
patterns, Mladen Lukic, gm of Travel
Counsellors, cautions that
the currency’s volatility and
unpredictability could have
a more significant and longlasting
impact. “Until we see
the rand trading at stable
levels for prolonged periods,
individuals, and especially
corporates, will be cautious
and some will trade-down as
a result.”
Garth Wolff, ceo of eTravel,
said the current depreciation
was mostly a result of
a spurt of international
investors pulling out of
emerging markets, nervous
about the trade war
sparked by US President
Donald Trump. Locally,
Eskom strikes, load
shedding, a 2,2% percentile
drop in South Africa’s Q1
GDP results, an unhealthy
current account deficit and
concern over the affairs
at state-owned entities,
have all added to a loss of
investor confidence in South
Africa.
But Garth remains
optimistic about the future.
“I do believe that under
Cyril, plans are being put in
place that will improve the
economy. This should, in
turn, help to firm the rand up
a little.”
