5 Rand (Nelson Mandela) – South Africa

In 2008, South Africa's currency, the rand, experienced extreme volatility and a sharp depreciation, driven by a "perfect storm" of domestic and international factors. The primary catalyst was the global financial crisis, which triggered a massive flight of capital from emerging markets like South Africa as international investors sought safer havens. This was exacerbated by a sharp decline in commodity prices, which hurt South Africa's key mining exports, and a record current account deficit nearing 9% of GDP, highlighting the economy's reliance on foreign capital inflows to balance its books.

Domestically, the situation was compounded by a severe electricity crisis. Widespread rolling blackouts ("load-shedding") implemented by Eskom from early 2008 crippled mining and industrial output, damaging investor confidence and economic growth prospects. Furthermore, political uncertainty intensified due to a power struggle within the ruling ANC, which led to the recall of President Thabo Mbeki in September 2008. This internal turmoil raised concerns about policy stability and direction, further discouraging investment.

Consequently, the rand plummeted, losing approximately 28% of its value against the US dollar between January and October 2008. The South African Reserve Bank (SARB) faced a difficult policy dilemma: raising interest rates to support the currency and curb inflation (which peaked above 13%) would further stifle an economy entering its first recession in 17 years. Ultimately, the SARB prioritized inflation, keeping rates high, which contributed to a painful economic contraction but helped stabilize the currency by the end of the year as global risk appetite tentatively returned.