The characteristics which a currency needs to possess before it could become popular as a transactions currency would include free convertibility, ability to invest, borrow, issue marketable instruments, significant volumes of international trade in different regions, stability of the exchange rate, the currency being a favoured choice for invoicing which would, interalia depend on the mutual negotiating strength of trading partners, availability of deep foreign exchange markets, cost-effective hedging facilities including forward cover, availability of efficient banking arrangement/market infrastructure, etc.
At the same time, a downturn in growth will also impede the banking sector recovery. The South African outlook Given this very challenging global environment, what are we observing in South Africa? The recovery is taking place, but it is hesitant, fragile and uneven.