Business

Walking the rand tightrope

Fluctuations in the value of the rand against the dollar and other major currencies continue to be a headache for South African technology firms – from outsourcing companies and systems integrators, through to software suppliers and hardware distributors.

31 January 2004

But they`re learning to live with it, becoming more flexible and competitive in the process.

Just two years ago, South African technology companies were praying that the rand would stop its never-ending slide against the dollar, euro and pound. Now that the volatile local currency has wiped out many of the losses it suffered in 2001, they`re complaining that the rand`s bull run in 2003 was perhaps too much of a good thing.

The strengthening of the rand over the last 18 months has helped to highlight inefficiencies still present in the South African IT industry despite several years of cost cutting and restructuring among the country`s major players. It has also drawn attention to more fundamental problems at offshore focused IT groups, where rand weakness has long helped to mask mediocre, sometimes poor, performance in hard currency terms.

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