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New currencies have been added

Citibank has been serving customers' financial needs by dealing in major currencies.
To expand the possibilities of your asset management, two more currencies have been newly added!
South African Rand (ZAR) and Norwegian Krone (NOK),
both hold people's attention because of their countries' features.
Your expectations are fulfilled with a wider variety of currencies!

NEW South African Rand

Sounth African Rand

ZAR/JPY

South Africa (ZA) is rich in mineral wealth such as gold, diamond and rare metals. Therefore, South African Rand (ZAR) is susceptible to the gold market price.

Gold market price continued rising slowly with the economic expansion of China and India after 2001 and ZAR gained against yen. On the other hand, a high-interest-rate currency, ZAR is sensitive with investor's risk tolerance because it is also a carry trade target currency targeting difference in interest rates. Thus ZAR also has a feature that it moves with US stock market, and the unwinding of yen-carry trade made it slide about 53 % against yen at the decline in stock prices from the sub-prime shock in 2007 to Lehman Shock in 2008. At this point, while the gold rose as a safe asset, ZAR yen dropped and the gold's relativity with ZAR was temporarily collapsed.

Then once signs of global recovery were shown, excess liquidity as a result of unprecedented monetary easing of countries' central banks went for commodity market, emerging country stocks and high-interest-rate currencies. ZAR again moved upwards against yen after hitting bottom at the low price of 7 yen level latter half in October 2008 and it recovered to 12 yen level first half in which technical Fibonacci point (recovered from the high price of 19 yen level latter half in 2006 to above mentioned low price 38.2 %) is positioned.

For ZAR's upward trend to continue in the future, not only improvement of market psychology, but also a full-scale recovery of South African economies will be necessary. Affected by a worldwide recession triggered by financial crisis, South African economies dropped sharply and GDP growth is expected to drop down from 3.1 % in 2008 to minus 1.7 % in 2009. The central bank cut policy rate from 12.0 % in 2008 to 7.0 % (as of August 2009), and Citibank consider it as a close of rate reduction.
Although worsening unemployment and fall in demand may be a heavy drag on domestic demand for the coming few years because of drastic stock constriction and job cuts of enterprises, South African GDP growth is expected to pick up to 2.4 % in 2010 and gradually be on the way to recovery.

The soccer World Cup held in South Africa in 2010 seems to support South African economy. Attention continues to be given to the gold price and US stock market movement by which ZAR exchange rate is likely to be affected.

Country name:	Republic of South Africa	Land area:	1.22 million km²
Population:	47.9 million (as of 2007)	Capital city:	Pretoria
GDP:	282.63 billion dollars (IMF 2007)	*Referred to the Foreign Ministry's website, except for GDP.

NEW Norwegian Krone

Norwegian Krone

NOK/JPY

Norway is rich in resources such as oil and natural gas extracted from the North Sea continental shelf, and Oil and Natural Gas Division makes up about 25% of its GDP and about 67% of export value. Hence, Norwegian Krone (NOK) has a high correlation with the crude oil price.

NOK showed a long-term upward trend against yen with a rise of crude oil price after 2001. After the subprime shock in 2007, as the term ‘flight to simplicity' came into the spotlight in the market, funds flow went from complicated financial product such as securitized paper to real assets such as gold and crude oil and this intensified a rise in crude oil price. At this point, NOK also showed steady movement against yen between 18 yen level latter half and 21 yen level latter half.

However, as financial uneasiness grew due to Lehman Shock, the central bank of each country all proceeded to cut interest rates and Norwegian central bank also lowered its policy rate from 5.75% to 1.25% (as of August 2009). Because of global specter of recession, crude oil prices dropped by about 80% from the high price of 147 dollars a barrel. Plummeting crude oil prices and carry trade recession due to narrowed gap in interest rates made NOK drop against yen by about 40%. Then, because crude oil price again turned upward with expectations of global economic recovery, NOK yen too has been recovering gradually after hitting bottom in January 2009.

Also, another feature of NOK is that as EU countries are the main destinations of its export accounting for 80%, it is susceptible to European economic too and it is highly correlated with euro rate both against USD and yen. Eurozone economy is likely to hit bottom in the second half of 2009 and this is expected to lead Norwegian GDP growth to recover to be positive in 2010.

Country name:	Kingdom of Norway	Land area:	386,000 km²
Population:	about 4,799,300 (as of January 1st, 2009)	Capital city:	Oslo
GDP:	403.1 billion dollars (2008)	*Referred to the Foreign Ministry's website.