A period when international investors are for some reason “spooked” and rush to take money out of more risky investments (like emerging markets) and place it in traditionally safe assets like US treasury bills. South Africa suffers during a “risk-off” period because short-term capital is taken out of the country and that has a negative impact on our rand. For example, in May 2018 the international investment community was decidedly “risk-off” and withdrew R50bn from South Africa causing the rand to drop sharply against the US dollar. Fortunately, international investors are always attracted by the much higher interest rates available in this country and so they tend to return sooner or later. The opposite of “risk-off” is “risk-on”.

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