inflation-adjusted) effective exchange rate of the rand since mid-2011, when the rand traded at less than R8 to the US dollar. However, the deficits have continued to be financed by savings from abroad as non-residents continue to invest in South African assets.
Only more recently, in the second quarter of 2015, has the deficit on the current account narrowed to 3,1 per cent of GDP – an improvement due to a number of factors, which include a reduction in industrial action, additional exports met by drawing down inventories, the lower oil price, and the impact of the sustained lower exchange value of the rand.