Rand crosses R14/$ again as market seeks direction on higher oil prices
The rand was firmer at midday on Thursday, but off intraday best levels, as the local currency showed muted reaction to the possible inflationary consequences of higher oil prices. A range of local and global issues is expected to keep the local currency on the back foot in December. These include S&P Global’s ratings announcement on Friday, as well as the US Federal Reserve’s interest rate decision in the middle of December. Higher oil prices could cause the Reserve Bank to re-examine its interest rate stance. Although the monetary policy committee at its last meeting indicated that the rate hiking cycle appeared to be nearing its end, it did not exclude further rate hikes in 2017, which would be dependant on global and economic developments. Brent crude was up 0.96% to $51.91 a barrel in late morning trade after spiking 7% on Wednesday after members of the oil cartel, Organisation of the Petroleum Exporting Countries, agreed to implement production cuts to boost prices.
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