GBP ZAR

The GBP/ZAR exchange rate tells you how many South African rands you need to buy one British pound. Backed by one of the world’s top economies, the GBP is one of the most traded currencies in the world. It is also a popular reserve currency and certainly a major. The ZAR, on the other hand, is not a major.

The GBP

The pound sterling is the world’s oldest currency that has been continuously in use since its inception. Throughout its history, the pound acted as commodity money several times, tied to gold and silver. Nowadays, it is a fiat currency. Its value is determined solely by the willingness of market participants to accept it as legal tender.

With the formation of the United Kingdom in 1707, the pound sterling replaced the pound Scots as legal tender in Scotland. By then, the latter had been pegged to the former at the exchange rate of 12 pound Scots per pound sterling.

When Ireland joined the union in 1801, it initially retained its currency, the Irish pound. Eventually, the pound sterling took over in Ireland too, in 1826.

As a member of the European Union, the UK could have replaced its GBP with the Euro. Not willing to give up its monetary independence, it refused to do so, however. Now that the country is out of the EU fold, the pound sterling’s status as a national currency has been ensured.

The GBP reached its lowest value against the USD in October 2016. At one point during that month, one GBP traded for USD 1.2232.

The ZAR

The South African rand was stronger than the USD upon its 1961 introduction. Back then, one ZAR was worth some USD 1.40. This situation persisted until 1971, when the dollar “flipped” the ZAR, as the latter lost value faster.

Until 1984, the faster depreciation of the ZAR remained in check. One USD was worth around ZAR 1.30 then. By February of 1985, the USD/ZAR rate hit 2. By 1993, the R3 per USD mark fell as well.

Beginning in 2001, the depreciation of the ZAR against the USD grew faster. In the wake of the September 11 attacks, traders paid R13.84 for one USD.

From that point, the ZAR did rebound, but nowadays, one USD costs around ZAR 18, so the trend has since resumed.

GBP/ZAR Analysis

The UK’s links with South Africa have always been special, going far beyond the common ground of a shared language.

The UK is one of the top investors in South Africa to this day. It also acts as a major market for South Africa’s exports.

Precious metals/stones, minerals, machinery, base metals, foodstuffs, and beverages dominate these exports.

On its part, the UK exports chemicals, turbines, engines, machinery, and electrical equipment to South Africa.