Rand continues its winning ways as it cracks through R12.35/$
The rand continued its winning ways on Monday morning as it powered through the R12.35/$ level for the first time since July 2015
The stronger local currency, which helps to keep inflation in check, has fuelled talk of a possible cut in interest rates later in the year.
Rand Merchant Bank (RMB) currency strategist John Cairns expected the central bank to cut rates at least twice in 2017 — in May and September.
The Reserve Bank’s monetary policy committee will be closely monitored this week against this backdrop. The Bank is widely expected to keep the repurchase rate on hold on Thursday, but is likely to revise down its inflation forecast for 2017, which currently hovers around 6.4%.
The latest bout of the rand strength has been partly traced to a weaker dollar, which is reeling from the expectation that the Federal Reserve will increase US rates gradually this year.
The rand has gained about 6% against the greenback over the past two weeks, although part of the rally was due to upbeat local data.
At 9.10am, the rand was at R12.3249 against the dollar from R12.4215. The rand was at R13.3895 against the euro from R13.4748 and at R15.46821 against the pound from R15.5229
The euro was at $1.0864 from $1.0838.