Final answer:
The South African rand fell due to economic uncertainty and interest rate differentials.
Explanation:
The South African rand fell to a new low against the US dollar from mid-February to mid-March 2023 due to:
- Economic Uncertainty: Uncertainties surrounding economic policies, political instability, or external market factors can lead to a loss of investor confidence, causing the currency to depreciate.
- Interest Rate Differentials: If interest rates in South Africa are lower compared to the US, investors may prefer to hold US dollars, leading to a decrease in demand for the rand and its depreciation.
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