THE rand steadied somewhat in late trade on Wednesday but was vulnerable to further news surrounding Finance Minister Pravin Gordhan.The local currency had slumped more than 3% against the dollar since late on Tuesday, after the Treasury confirmed the receipt of a letter from the Hawks‚ asking Gordhan to present himself on Thursday.Renewed rand weakness could put pressure on the Reserve Bank’s monetary policy committee‚ which meets in September to decide on interest rates.A weaker rand stokes inflation‚ which moderated to an annual rate of 6% in July from 6.3% in June, according to the latest Statistics SA data.The rand also faces a threat from potential strength in the dollar if the US Federal Reserve raises rates in 2016.Sanlam Private Clients head of online trading Gerhard Lampen said the recent strength in the rand was overextended and not supported by fundamental data."The first reason is that the extent of the pendulum swing when the rand strengthened went a bit too far, as it...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.