After posting one of the strongest rallies in emerging markets this year, SA’s rand is headed for a 12% drop in 2017, according to analysts polled by Bloomberg. But Deutsche Bank says they have got it wrong. The fourth-biggest foreign-exchange trader is disregarding political uncertainty that has slowed the currency’s advance in 2016, predicting a gain of about 7% to R12.50/$ next year. Inflation outlook Inflation is slowing. The South African Reserve Bank expects the rise in consumer prices averaging 5.8% in 2017, down from a seven-year high of 7% in February. That meant the yield on South African assets would remain attractive, even as US interest rates rose, Deutsche Bank economist Danelee Masia said in a report on December 5. Economy rebounding SA’s economy barely avoided a recession in 2016, but things are looking up. Growth should accelerate to 1.4% in 2017, more than the central bank’s estimate of 1.2%, as companies rebuilt profit margins through a combination of cost efficie...
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.