The Rand stays strong, trades in a tight range

The Rand has been buoyed by positive sentiment since last week’s Budget speech and rumours of a Cabinet reshuffle on the cards at the ANC National Executive Committee. Further support was expected during and after last night’s reshuffling of Malusi Gigaba and the reappointment of Nhlanhla Nene as Finance Minister.

While the news has been well received by markets and local South Africans alike, the Rand remained relatively muted. In the early afternoon it even slipped to a two-day low to the USD. The Rand is still trading between R11.50 and R11.65 against the US Dollar, but pressure is coming as the greenback attempts to repair some of the weakness it experienced in recent weeks.

Free signup to our Expat Matchjust click now !!

Along with appointing Nene, Ramaphosa also appointed Pravin Gordhan to oversee the Public Enterprise Department. These moves have been viewed favourably by South African business leadership and added to the growing optimism of an economic boost yet to come. In support of this, some analysts are expecting Moody’s rating for South Africa to be unchanged on 23 March.

The good sentiment from political developments, like last night’s cabinet reshuffle, has buoyed local equity markets which are up over 7% since the major low seen on 6 February. With jubilant emotions in the air and high hopes among investors, business leaders, and South African residents, it is worth noting that political changes often take time to show results and further future successes may already be priced into the Rand’s current gains.

On the economic calendar, last week saw a continued decline in inflation. This week local and international traders will be watching Wednesday’s trade balance which may offer a push back in the short-term against the Rand’s strength. January figures usually yield an above average deficit.

Free signup to our Expat Matchjust click now !!

Enjoyed this post? Share it!


Leave a comment

Your email address will not be published. Required fields are marked *