The impact of exchange rates

What is an exchange rate?

An exchange rate shows the value of a country’s money in terms of another country’s money. For example, if the Rand-Dollar exchange rate is 15 to 1, it means that you get $1 for every R15 you exchange. Exchange rates are affected by the country’s interest and inflation rates, political stability, economy and government.

 

How will this affect car prices?

The exchange rate has a significant impact on the price of vehicles sold in the country. Many cars are imported so they will be more expensive if the Rand gets weaker.

 

But what about locally-produced cars?

Even though South Africa manufactures and assembles many cars locally, they often still use imported parts and will also become more expensive if the currency fluctuates.

 

In short, as long as cars and car parts are imported, all car prices are directly affected by the currency exchange rate.

 
 

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