South Africans have one person to thank for the lowest Rand exchange rate ever: president Cyril Ramaphosa. 💸 TheCitizenBusiness Read more on TheCitizenNews
The role of the repo rate increase
In addition, the BER says the MPC often mentions the Rand as one of the key upside risks to its inflation forecast. “The deterioration in the Sarb’s medium-term outlook for the current account may have also added to the downbeat sentiment towards the Rand. The Nedbank Group Economic Unit says the Rand’s slide towards new lows continued during the past week, dipping to a new record low of R19.8376 against the US dollar on Thursday. “Some investors were disappointed with the decision to raise the policy rate by 50 basis points, instead expecting a larger 75 basis points hike.”
“However, recently the Rand has weakened even relative to other emerging currencies which suggests that it is the events within our borders that created this depreciation. Nobody will be too shocked to hear that those events included rolling blackouts and the general sentiment that the South African government is making decisions that are subpar and detrimental to the local economy.
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