Retrieve the nominal exchange rates between the euro (EUR) and the South African rand (ZAR) from the European Central Bank statistics section: “Euro foreign exchange reference rates.” It is quoted as ZAR per 1 EUR.
a. According to the terminology of the chapter when the ex-change rate is quoted as ZAR per EUR which of the two currencies is treated as the domestic currency?
b. Plot the ZAR per EUR curve since 1995. During which times did the rand appreciate? During which periods did the rand depreciate?
c. One way of boosting its economy is for the South African government to make its commodities more attractive. Does this require an appreciation or depreciation of the rand?
d. What has happened to the rand since the global financial crisis of 2008? Has it appreciated or depreciated and is this good or bad for South Africa?