EUR ZAR

The EUR/ZAR pair defines how many South African Rands it takes to purchase one Euro. The current EUR/ZAR exchange rate is 20.42, meaning that one Euro is worth 20.42 ZAR.

The Euro is a major currency. The ZAR is not. The EUR/ZAR pair is therefore not a major currency pair.

The EUR

The EUR was first implemented in 1999 as a unit of account. It only took physical form, with circulating banknotes and coins, in 2002. That said, the idea of the Euro had been around for decades before its implementation.

The predecessor of the European Union floated the idea of a common currency in the 1960s. Whether the Euro is an ideal embodiment of these initial concepts, is difficult to ascertain.

There are certain flaws in its design and implementation, its critics and sometimes the very people who thought it up, often discuss. One such flaw is the lack of a fiscal union backing up the monetary union that the Euro represents.

Without harmonized fiscal legislation among the member states, many fear the currency is doomed to fail.

The Euro is currently the second most traded currency in the world, behind the USD. It is also a popular reserve currency.

Some countries outside the Eurozone, have adopted the EUR de-facto. Such countries are Kosovo and Montenegro.

On the other hand, some countries compelled by treaty to adopt the Euro seem to be dragging their feet on the issue.

The ZAR

The South African rand is the official currency of South Africa. Other countries that use the rand are Lesotho, Namibia, and Eswatini. These countries do have their own currencies, however. They have pegged these currencies to the rand at a fixed rate.

Another country that used the rand was Botswana. It replaced the ZAR with its currency, the pula, in 1976.

Introduced in 1961, the ZAR started stronger than the USD. One rand was worth USD 1.40, till 1971. It was not until 1982, however, when the USD reached parity and they exceeded the rand in value.

In December 2001, the rand hit its historic low of 13.84 against the USD.

EUR/ZAR Analysis

Despite its geographical remoteness, South Africa is the biggest trading partner of the EU in Africa.

The economy of the country is indeed the second-largest in Africa, after that of Nigeria. Manufacturing, mining, and agriculture are some of the pillars of the South African economy.

Thus, economic variables related to these sectors influence the EUR/ZAR exchange rate.