Characterising Exchange Rate Policies of Selected SADC Countries before, during, and after 2007/2008 Global Financial Crisis (GFC): An Anchor Currencies' Influence Analysis

SADC countries have been increasingly opening to world trade, raising concerns about the exposure and vulnerability of their currencies to the world financial markets. This paper investigated the behaviour of the exchange rates of selected SADC countries before, during, and after the 2007/2008 financial crisis through modelling the influence of the international anchor currencies. For this purpose, the structural vector autoregressive (SVAR) model was used. The study found that the U.S. Dollar has the dominant influence on the four countries (Angola, Botswana, Tanzania, and Zambia) currency markets, while Euro has the dominant influence on the rand market. The paper's results indicate that, in general, the U.S. Dollar had a major influence on sample SADC currencies, followed by EURO and the Chinese RMB. The policy implications and suggestions are discussed.