It is fair to say that at levels above R7 to the dollar, the unit is grossly undervalued. This is largely because emotional events in Zimbabwe, rather than level-headed economic fundamentals, have undermined its value. Markets have, however, forgotten that an undervalued exchange rate boosts commodity exports, the trade account and the current account of the balance of payments. Ironically, this creates a platform on which the rand can begin strengthening. And the dollar's strength should not be overestimated.
Speculators seem to have ignored the economic fundamentals.