Right now, Brent Crude is:
Brent Crude Oil :91.46
Rand - US Dollar: 6.6100
Oil prices breached the $96 before retreating marginally. Analysts are now saying that $100 is an 'easy target'.
Meanwhile, from South Africa's point of view, the prices of Brent Crude are less of a concern given that the dollar has depreciated down to around 6.50. Had the dollar been at around 7.50, we'd have been in big trouble.
The question is, why has the Rand strengthened so much, and is it good for the country. The $5.5 billion deal - the largest ever overseas investment in South Africa - between the world's largest bank (based on China) and Standard Bank, represents a massive capital injection into the relatively small pool of South African capital. This is the main reason behind our stronger currency. The deal was timed very fortuitously indeed.
Meanwhile the strengthening Rand is bad news for exporters. Since South Africa derives plenty of its income from exports - especially minerals - the currency fluctuation remains a concern.
Today decision makers will come together to decide whether there will be a fuel increase for motorists, and if so, how much it is likely to be.
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