ZAR vs INR A Tale of Two Struggling Emerging Markets Currencies

Naturally, the big growth in their economies has a positive effect on their currencies. 

With South Africa and India among the top five growing markets, the South African rand (ZAR) and Indian rupee (INR) also take the spotlight. But the ZAR vs INR currency pair has had their fair shares(check this page and learn how to buy shares) of struggles lately.

The ZAR vs INR pair is on track to face fresh challenges this year, which will measure its resilience. Investors will focus on how it can preserve its market value and remain a favorable trading channel. As of May, a single South African rand averagely costs 5.40 Indian rupee – a huge leap from its 2017-level but a notable decline from its historic high of 5.6215 recorded two months ago.

As political and economic uncertainties hit both emerging markets, it looks like there will be more future concerns about the value of ZAR vs INR. India has been recently struggling with a serious banking crisis. With investors fleeing the Indian financial markets, the rupee became the catch basin of this crisis. The most pressing issue is the country’s amount of trade deficit, which has doubled up from its last year’s level. In March 2017, the annual trade deficit was at $47.7 billion.

This year, on the same month, it was standing at over $87 billion. Meanwhile in South Africa, its national currency has been battered with issues related to problematic domestic monetary policy and political instability. The value of South African rand remains lower as the credit rating for the currency has been downgraded to “junk” or below the investment grade.

This could result in a loss of more than $8 billion of investments, when investors exit the South African market(https://www.oinvest.com/en/cryptocurrency-market).

With a wave of political and fiscal challenges flooding the ZAR vs INR currency pair, its road to recovery may be bumpy to say the least.