Tuesday, March 10, 2015

Rand to the Dollar

I recently bought a small bottle of liquid makeup here in South Africa that costs the equivalent of about $29 US. My son will be visiting with his wife soon and will be bringing a bottle of the same makeup that cost $8.09 on Amazon. Most items here are comparable in price if they are manufactured in South Africa, but buying American products here is very expensive. Of course, we try to find similar products that are not American made, but there are a few familiar products that we end up paying the cost for.
about 6 ounces 
 There are 8! small flour tortillas in this package

Mexican food at the grocery store is an example. It’s a new phenomenon here it seems. There are no Mexican restaurants (we found two small places that claimed to be, but serve things like stir fry along with "nachos" that had something like sweet chili sauce on them.) We are, however, starting to find a few Mexican food products in the store. That would be great (since we really, really miss Mexican food) except that they are made in the US. Thus the prices are high and the quantities are small.

There are probably a few reasons for the high price of American products. The cost of importing has to add a substantial amount of course, but the other thing is that the dollar is becoming stronger in comparison to the rand. When we came here, the exchange rate was just below11 rand to the dollar. Now it costs 12.24 rand for a dollar. That would be good for us if we were buying a car and flying it home, but because most of our costs are pretty fixed while we are here, we feel the results mostly when we purchase anything from home. It seems that the rand might slide even further from the dollar as the US economy strengthens and the unemployment rate decreases there. I am told that the US jobless data links to their decision to stop stimulus dollars, which will mean fewer US dollars to South Africa and therefore a weaker rand. The economy in South Africa is already suffering as the productivity has dropped. I have heard reports that the “load shedding” that happens regularly (power being turned off for indeterminate amounts of time) contributes to this, but South Africans also say that an inefficient government (not the description they use) is the major cause.

It’s all very interesting, and I will hope for South Africa that their economy strengthens to compares more favorably to the dollar especially next time I need to go buy another bottle of makeup J

1 comment:

  1. Can we being you a fresh burrito or tamales? ;-)