Fluctuation in exchange rate has continued to be a major treat to economic growth and maintaining its stability and competitiveness poses serious concern to government and all stakeholders. Despite series of policies and programmes undertaken by governments of various countries, exchange rate instability remains a menace. This paper evaluated the impact of some macroeconomics variables on South Africa’s Rand using annual time series data from 1970 to 2021. Multiple regression with OLS estimator was adopted for the data analysis and the results showed that exchange rate has positive relationship with interest rate while it has negative relationship with gross domestic product growth rate and net foreign trade. Although these individual relationships are not significant enough to influence the exchange rate but there is evidence the combine effect of these macroeconomic variables has significant influence on exchange rate in South Africa.
Keywords: Exchange Rate, Interest Rate, gross domestic product growth, net foreign trade
