{"id":57417,"date":"2026-04-28T07:22:04","date_gmt":"2026-04-28T07:22:04","guid":{"rendered":"https:\/\/eduzim.co.zw\/news\/?p=57417"},"modified":"2026-04-28T07:22:04","modified_gmt":"2026-04-28T07:22:04","slug":"why-currency-strategy-is-as-important-as-investment-strategy","status":"publish","type":"post","link":"https:\/\/eduzim.co.zw\/news\/2026\/04\/28\/why-currency-strategy-is-as-important-as-investment-strategy\/","title":{"rendered":"Why Currency Strategy Is As Important As Investment Strategy"},"content":{"rendered":"<p> <script data-jetpack-boost=\"ignore\" async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-1669381584671856\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- Africa tv video display -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-1669381584671856\"\r\n     data-ad-slot=\"3579572842\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script data-jetpack-boost=\"ignore\">\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<\/p>\n<div>\n<div class=\"a-wrap a-wrap-base a-wrap-5\">\n<div class=\"aasdf-single aasdf-227\"><img data-recalc-dims=\"1\" decoding=\"async\" fetchpriority=\"high\" class=\"alignnone wp-image-4051989 size-full\" src=\"https:\/\/i0.wp.com\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?resize=640%2C79&#038;ssl=1\" alt=\"\" width=\"640\" height=\"79\" srcset=\"https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?lossy=2&amp;strip=1&amp;webp=1 728w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-300x37.jpg?lossy=2&amp;strip=1&amp;webp=1 300w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-150x19.jpg?lossy=2&amp;strip=1&amp;webp=1 150w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-450x56.jpg?lossy=2&amp;strip=1&amp;webp=1 450w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?size=577x71&amp;lossy=2&amp;strip=1&amp;webp=1 577w\" sizes=\"(max-width: 728px) 100vw, 728px\"\/><\/div>\n<\/div>\n<p dir=\"ltr\">Many South Africans have viewed offshore investment as an informal insurance policy to protect their wealth, so they would move their money abroad, buy into the S&amp;P 500 or a global tech fund, and wait for market returns plus a weakening rand to do the rest.<\/p>\n<p dir=\"ltr\">For a long time, that delivered easy wins. Today, not so much. With surging geopolitical conflict, fluctuating interest-rate expectations and a more complicated domestic fiscal picture, relying on offshore equity and the rand to do the heavy lifting leaves too much to chance. Even a 10% dollar return means little if you lose 2-3% to the bank\u2019s hidden spread fees before the money even reaches your offshore account, or if the rand strengthens after you convert into another currency.<\/p>\n<p dir=\"ltr\">This is why how you manage currency risk has become as important as your investment strategy.<\/p>\n<p dir=\"ltr\">Understanding how this works starts with unpacking the underlying mechanics:<\/p>\n<h2 dir=\"ltr\">The ZAR is mispriced, and not in your favour<\/h2>\n<p dir=\"ltr\">On most fair-value measures, the rand trades materially weaker than the country\u2019s terms of trade, inflation differentials and current account suggest it should. The gap is a risk premium, and currency strategists including ETM Analytics, have explicitly linked the rand\u2019s weakness to a geopolitical risk premium, driven by the Middle East crisis.<\/p>\n<div class=\"a-wrap a-wrap-base a-wrap-8 alignwide\">\n<div class=\"aasdf-single aasdf-227\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-4051989 size-full lazyload\" src=\"https:\/\/i0.wp.com\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?resize=640%2C79&#038;ssl=1\" alt=\"\" width=\"640\" height=\"79\" srcset=\"https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?lossy=2&amp;strip=1&amp;webp=1 728w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-300x37.jpg?lossy=2&amp;strip=1&amp;webp=1 300w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-150x19.jpg?lossy=2&amp;strip=1&amp;webp=1 150w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-450x56.jpg?lossy=2&amp;strip=1&amp;webp=1 450w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?size=577x71&amp;lossy=2&amp;strip=1&amp;webp=1 577w\" data-sizes=\"auto\" style=\"--smush-placeholder-width: 728px; --smush-placeholder-aspect-ratio: 728\/90;\" data-original-sizes=\"(max-width: 728px) 100vw, 728px\"\/><\/div>\n<\/div>\n<p dir=\"ltr\">After the initial US-Israeli-Iranian strikes last month, the rand slumped from roughly R15.90 to over R17.10 against the dollar. Yields on the 2035 benchmark bond climbed above 9.1%, reflecting the higher risk premium investors now demand. Sharp overnight drops of 1.5% or more were directly attributed to news coverage about the war.<\/p>\n<p dir=\"ltr\">As an emerging-market currency, the rand is especially vulnerable to shocks because investors typically dump riskier assets and rush into safe\u2011haven currencies when volatility spikes.<\/p>\n<p dir=\"ltr\">South Africa\u2019s reliance on fuel imports further weakens its position, so when the war premium pushes Brent crude above $120 per barrel \u2013 the threshold where the economic impact shifts from manageable pressure to causing damage \u2013 it tilts the trade balance and fuels domestic inflation. Higher gold prices, normally a tailwind for the rand, have also been overwhelmed by dollar strength.<\/p>\n<p dir=\"ltr\">The practical consequence: The exchange rate you get on any given transfer day is increasingly a matter of luck, unless you have a process.<\/p>\n<h2 dir=\"ltr\">Nominal returns don\u2019t pay foreign bills<\/h2>\n<p dir=\"ltr\">Most investors still measure offshore success in nominal terms. The global equity fund is up 12%. The JSE underperformed again. But your financial life might be denominated in school fees in London, a retirement flat in Lisbon, or healthcare costs paid in euros.<\/p>\n<p dir=\"ltr\">If you are funding a child\u2019s tuition in the UK, the return your investments generate is only one variable. The exchange rate at the point of conversion, and the inflation rate in both South Africa and the destination country, matter just as much. A strong year for markets can be wiped out by one badly timed transfer. A period of unexpected rand strength is a chance to pre-fund future obligations, but only if you\u2019re set up to take it.<\/p>\n<h2 dir=\"ltr\">The SDA increase changes the game<\/h2>\n<p dir=\"ltr\">Following the 2026 Budget Review, the SARB issued a package of exchange-control circulars that doubled the Single Discretionary Allowance for South African residents from R1 million to R2 million per adult per calendar year. That is the amount you can externalise without a tax clearance.<\/p>\n<p dir=\"ltr\">A higher SDA makes it more realistic to fund offshore exposure in multiple tranches rather than in a single lump sum. Early this month, the GBP\/ZAR traded between roughly R21.80 and R22.60 in a fortnight, a spread big enough to drastically change the cost of a R1 million transfer. Over several years of tuition, that difference compounds into a material sum.<\/p>\n<h2 dir=\"ltr\">What disciplined investors do differently<\/h2>\n<figure id=\"attachment_4052799\" aria-describedby=\"caption-attachment-4052799\" style=\"width: 200px\" class=\"wp-caption alignleft\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"wp-image-4052799 size-medium lazyload\" src=\"https:\/\/i0.wp.com\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/Harry-Scherzer-CEO-of-Future-Forex-200x300.jpg?resize=200%2C300&#038;ssl=1\" alt=\"Harry Scherzer, CEO of Future Forex\" width=\"200\" height=\"300\" srcset=\"https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/Harry-Scherzer-CEO-of-Future-Forex-200x300.jpg?lossy=2&amp;strip=1&amp;webp=1 200w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/Harry-Scherzer-CEO-of-Future-Forex-100x150.jpg?lossy=2&amp;strip=1&amp;webp=1 100w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/Harry-Scherzer-CEO-of-Future-Forex-150x225.jpg?lossy=2&amp;strip=1&amp;webp=1 150w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/Harry-Scherzer-CEO-of-Future-Forex-450x675.jpg?lossy=2&amp;strip=1&amp;webp=1 450w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/Harry-Scherzer-CEO-of-Future-Forex.jpg?lossy=2&amp;strip=1&amp;webp=1 661w\" data-sizes=\"auto\" style=\"--smush-placeholder-width: 200px; --smush-placeholder-aspect-ratio: 200\/300;\" data-original-sizes=\"(max-width: 200px) 100vw, 200px\"\/><figcaption id=\"caption-attachment-4052799\" class=\"wp-caption-text\">Harry Scherzer, CEO of Future Forex<\/figcaption><\/figure>\n<p dir=\"ltr\">No one knows what the rand will trade at in future. But investors who get offshore conversion right aren\u2019t forecasting: they\u2019re treating currency as an ongoing exercise, built on three consistent habits.<\/p>\n<p dir=\"ltr\">The first is phasing. Instead of converting a single lump sum when they can, they move money on a rule, either as a fixed rand amount each month, or additional buying when the rate trades stronger than a pre-agreed reference point. The larger SDA makes that practical for ordinary households for the first time, because the new allocation is more generous.<\/p>\n<p dir=\"ltr\">The second is matching known liabilities with forward exchange contracts (FEC). Where a foreign-currency obligation is already scheduled, such as a property purchase, a term\u2019s school fees, or a recurring overseas invoice, an FEC fixes today\u2019s rate for a future settlement date. It is a trade off: you also forgo any upside if the rand rallies. But it also means that an overnight percentage move on a new crisis doesn\u2019t have a significant impact on your budget.<\/p>\n<p dir=\"ltr\">The third is finding the right international money transfer provider. If you\u2019re using a traditional bank to send funds offshore, the gap between the interbank mid-rate and what a retail client actually receives on a personal transfer is often 2-3%, before explicit fees. On a R5 million allocation, that is R100,000 to R150,000 gone before the money has touched an offshore account, regardless of what the stock market does.<\/p>\n<p dir=\"ltr\">Specialist foreign exchange providers typically offer a far more competitive and transparent pricing model. Even more valuable is finding one that offers complimentary SARS compliance support.<\/p>\n<p dir=\"ltr\">For a long time, South African offshore investors could afford to be passive about currency, because the rand was working in their favour. Those days are over. While fund selection still matters, it is now increasingly about having a solid plan in place.<\/p>\n<ul>\n<li dir=\"ltr\">Harry Scherzer, CEO of Future Forex<\/li>\n<\/ul>\n<div class=\"a-wrap a-wrap-base a-wrap-6\">\n<div class=\"aasdf-single aasdf-227\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-4051989 size-full lazyload\" src=\"https:\/\/i0.wp.com\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?resize=640%2C79&#038;ssl=1\" alt=\"\" width=\"640\" height=\"79\" srcset=\"https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?lossy=2&amp;strip=1&amp;webp=1 728w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-300x37.jpg?lossy=2&amp;strip=1&amp;webp=1 300w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-150x19.jpg?lossy=2&amp;strip=1&amp;webp=1 150w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028-450x56.jpg?lossy=2&amp;strip=1&amp;webp=1 450w, https:\/\/b2726120.smushcdn.com\/2726120\/wp-content\/uploads\/2026\/04\/04149-CC-Standard-AF-Display-728x90-028.jpg?size=577x71&amp;lossy=2&amp;strip=1&amp;webp=1 577w\" data-sizes=\"auto\" style=\"--smush-placeholder-width: 728px; --smush-placeholder-aspect-ratio: 728\/90;\" data-original-sizes=\"(max-width: 728px) 100vw, 728px\"\/><\/div>\n<\/div><\/div>\n<p><script data-jetpack-boost=\"ignore\" async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-1669381584671856\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- Africa tv video display -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-1669381584671856\"\r\n     data-ad-slot=\"3579572842\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script data-jetpack-boost=\"ignore\">\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n#Currency #Strategy #Important #Investment #Strategy<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Many South Africans have viewed offshore investment as an informal insurance policy to protect their wealth, so they would move&hellip;<\/p>\n","protected":false},"author":1,"featured_media":57418,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[],"class_list":["post-57417","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mzansi"],"_links":{"self":[{"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/posts\/57417","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/comments?post=57417"}],"version-history":[{"count":1,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/posts\/57417\/revisions"}],"predecessor-version":[{"id":57419,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/posts\/57417\/revisions\/57419"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/media\/57418"}],"wp:attachment":[{"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/media?parent=57417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/categories?post=57417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/tags?post=57417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}