Your future shopping basket plays a key role - August 2021
Many items in a South African consumer’s shopping basket (from fuel to food to healthcare) are largely priced in foreign currencies as the inputs are either commodities (with prices struck in global markets), or heavily reliant on imported content. Having adequate international exposure acts as a hedge against the long-term change in price of this part of your future shopping basket. Episodes of currency weakness will more than likely remain a strong driver of price increases into the future.
Having more than the minimum offshore exposure may also be warranted for those planning for future liabilities in hard currency. This would include expenses such as overseas travel (for leisure purposes or visiting family members living abroad) or business opportunities, investing for a next generation’s education, or emigration.
What portion of your future shopping basket is priced in foreign currency?
Consider your everyday expenses that are influenced by currency fluctuations, including: