The South African rand

Who stands behind the rand

The South African Reserve Bank opened for business on 30 June 1921. Before then commercial banks issued the notes, and each note had to be backed by gold. The First World War pushed the gold price in Britain above the South African one, so anyone could profit by turning notes into gold at home and selling it in London. The banks asked to be freed from converting on demand, a Gold Conference met in October 1919, and a select committee of Parliament recommended a central bank.

In 1944 the South African Reserve Bank Act replaced the Currency and Banking Act of 1920 and extended the bank's initial 25-year period of issuing notes indefinitely. Act 90 of 1989 replaced the 1944 law in turn. The 1996 Constitution gives the bank one primary goal: to protect the value of the currency. The South African Mint strikes the coins.

How the pound gave way to decimal money

A Decimal Coinage Commission, set up in 1956, reported on 8 August 1958, and Parliament passed the Decimalisation Coin Act in 1959. The rand arrived on 14 February 1961, three months before South Africa became a republic. It took the pound's place at two rand to one pound, or ten shillings to the rand. The pound coin became a two rand coin, the shilling a ten cent coin and the threepence a coin of two and a half cents. To teach the change, the government put out a mascot called Decimal Dan, "the rand-cent man", with a radio jingle.

The name comes from the Witwatersrand, the ridge where Johannesburg stands and where most of the country's gold deposits were found. Rand is the Afrikaans and Dutch word for ridge.

Why Lesotho and Namibia keep it at par

South Africa, Lesotho and Swaziland signed the Rand Monetary Area into being in December 1974, and in that year Lesotho and Swaziland set up national currencies of their own. The Common Monetary Area replaced it in July 1986. When Namibia formally joined in February 1992 the arrangement became the Multilateral Monetary Area, and Namibia issued its own dollar in 1993.

The arrangement links South Africa, Namibia, Lesotho and Eswatini. Each partner's currency is legal tender only at home, trades at par with the rand, and sits beside the rand, which is legal tender throughout. Exchange rules and monetary policy across the area reflect the influence of the Reserve Bank. Botswana used the rand too, until the pula replaced it at par in 1976.

The rand also circulated in Zimbabwe during the years that country ran on foreign money, more in Bulawayo, near the South African border, than in Harare, where most shops priced in US dollars.

What the coins and notes carry

Six coins circulate: 10c, 20c, 50c, R1, R2 and R5. They run from 16 mm for the 10c to 26 mm for the R5, and the Reserve Bank gave them different sizes and rim finishes so that a visually impaired person can tell them apart by touch. Electroplated coins came in during 1989 to cut the cost of metal, and a bimetal R5 replaced the nickel one in 2004. Production of the 1c and 2c stopped in 2002 and of the 5c in 2012. Those coins remain legal tender. Shops round a total to the nearest ten cents.

The first rand notes of 1961 came in 1, 2, 10 and 20 rand and carried a portrait believed to show Jan van Riebeeck. It turned out to be Bartholomew Vermuyden. Big Five wildlife notes followed from 1992, and notes bearing Nelson Mandela entered circulation on 6 November 2012. On 3 May 2023 the bank announced a series that keeps Mandela on the front and puts the Big Five, drawn as families, on the back.

The Reserve Bank does not demonetise. Every note it has issued keeps its face value, and old ones can be exchanged at its head office in Pretoria.