South Africa has 11 official languages, so there are plenty of ways to characterize the recent moves with the country's currency. However you say it, though, things look bad for the rand — at least on the surface.
The currency fell more than 2 percent on Monday to its weakest in almost three months after S&P Global Ratings cut the country's credit score to sub-investment grade with a negative outlook after last week's dismissal of the South African finance minister.
Already, last week was ZAR's worst since 2015, with the rand weakening several percent against the dollar in the same month that it hit its best level versus the greenback in 20 months. All of this in the wake of President Jacob Zuma's decision to fire his highly-respected finance minister, Pravin Gordhan. The ruling African National Congress is divided. Demonstrations are planned all week, culminating in a large protest in Johannesburg on Friday. And the speaker of South Africa's parliament is considering an opposition request to hold a no-confidence vote on Zuma. Sure, it's a real mess, but what does it mean for the rand?
"I would say, potentially, there could be some more weakening in the rand in the short term," said Saktiandi Supaat, Global FX Strategy at Maybank. "Maybe another 5, 10, 20 percent potentially. It could actually move further than that if developments start to worsen."
The political upheaval in South Africa is getting in the way of a strong recovery for the rand. It hit a high against the dollar in 2011, but then slowly started falling, hitting record lows at the end of 2015 and beginning of 2016 as commodity price weakness and market turbulence in China weighed. But investors shouldn't abandon the rand, according to Jim Rickards, co-founder and chief global strategist at Meraglim.
"I think most of the most of the bad news is out," he said in an interview with CNBC's "Street Signs."
"The rand is right in the middle of a five-year trading range. It's gone as high as 8 (vs. the dollar) and as low as 17," he added.
Rickards indicated that global capital flows, the price of gold and the U.S. Federal Reserve policy have a stronger influence on the South African currency than what he called "short-term stories."
"How much worse can this get? [Zuma] already did the reshuffling. He fired a fairly competent finance minister. It looks like he'll survive the no-confidence vote," said Rickards. "But if he doesn't survive and you get better leadership, then that's actually very bullish for the rand. It looks like a bottom, it looks like a good entry point."
Maybank's Saktiandi Supaat agreed.
"My sense is I think once it stabilizes, it's actually a good opportunity to get back on the rand again."