However, since 2011 the rand has followed a relatively volatile depreciating trend, driven by various factors, including the terms-of-trade deterioration, idiosyncratic domestic factors, bouts of global risk aversion (related in particular to the eurozone crisis) and, more recently, the partial reversal of capital flows in anticipation of higher interest rates in the advanced economies.
However, the response of both the manufacturing sector and exports to the weakening exchange rate has been disappointing, although in recent months we have seen tentative signs of current-account adjustment, both through higher export volumes and through lower import volumes.