Currency uncertainty will add complexity to monetary policy, warns Reserve Bank
The rand and other emerging market currencies will remain volatile, which adds complexities to monetary policy, warned Deputy Reserve Bank governor Daniel Mminele. He cited the continued tightening in global financial conditions, a change in investor sentiment towards emerging markets, escalating trade conflicts, and geopolitical developments as key risks to the rand. “What the future holds remains uncertain,” he said in Sandton on Wednesday. “As such, it is likely that the rand, along with other emerging market currencies, will remain volatile,” he said. Rand forecasts remain widely dispersed as a consequence of this, he said. “This uncertainty adds significant complexity to the conduct of monetary policy, the most recent outcome of our monetary policy meeting and the finely balanced decision being a good case in point.”
This comes just a week after the Bank raised the repo rate for the first time in two years by 25 basis points. The monetary policy committee (MPC) warned las...
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