South Africa’s 12% main rate has made the rand a favorite of the carry trade – where investors take advantage of a disparity in the interest rates associated with a pair of currencies – for some time now. But a successful carry trade can be wiped out by a simple fall in the pair.

The Rand ZAR has not been what you might call strong in a long time – but in the last few months, it has plummeted, shedding almost 20% against USD to reach a five-year low.

Essentially, the currency has caught up in the credit crisis and the extreme aversion to risk. It’s hard to see the Rand doing anything other than continue to weaken.