Rob Glenn Economics Reports 3/13/14South Africa is the most powerful and prosperous economy on the African continent. But this economic power is in difficulty and showing signs of distress. (World Book) Their economy has been in decline for four years. This is demonstrated through the study of their macroeconomics and exchange rate, as well as inflation. Firstly, the country of South Africa has a floating exchange rate. This means that the value of their money is determined by the laws of supply and demand. The South African rand has not enjoyed much success on the open market. For example, the exchange rate between other global economic superpowers like New Zealand, Australia, British Pound, Euro and US Dollar is between 9.2 and 17.9 South African Rand per compared to the currencies of other countries. (exchangerates.org) This proves that the value of the rand is not worth much in the global market compared to other countries' currencies and has reached its lowest value in the last five years. In January 2014, South Africa's inflation rate was around 5.9 percent. (tradingeconomies.com) The average inflation rate in South Africa was around 9.47% between 1968 and 2014. (Tradingeconomies.com) The average inflation rate in the previous year was around 5. 40, and the highest inflation rate ever recorded by the South African market was 20.90, but on the other hand, they experienced an extremely low inflation rate of around 0.20 during of a period of economic growth in South Africa. (tradingeconomies.com) The forecast inflation rate for the rest of the year is expected to be around 5.54 percent. (Tradingeconomies.com) The South African economy records an average price increase of 0.7% on a monthly basis... middle of paper ......itage.org) The South African economy, once booming, is in decline as their markets struggle to gain their place in the world while their economy continues to emerge. (World Book) The main macroeconomic problem that South Africa suffers the most from is the difficulty in providing employment to many of its citizens at home. They also suffer from a poor free market exchange rate and continue to struggle to reduce their inflation rate. “The main problems facing South Africa – and how to solve them” (July 18, 2011). www.leader.co.za/printarticle.aspx?s=1+f=1+a=2893. Retrieved from www.leader.co.caReuters. (March 12, 2014). “South Africa’s economy slows,” Business Report. Form retrieved from www.iol.co.za.www.exchangerates.orgwww.tradingeconomies.com/southafricawww.Heratige.org/index/country/southafricawww.economist.com