Dollar rally could push rand over R13 level
Portfolio outflows from SA accelerate in May as global risk aversion takes over
The rand, just after its biggest weekly drop in more than a year, may breach R13/$ for the first time in five months after a surging dollar and weaker emerging markets prompted foreigners to offload South African assets. The rand hovered around R12.80 on Monday — after a 4.1% slide last week, which was the biggest since March 2017 — as traders awaited the latest inflation report and the Reserve Bank’s monetary policy decision. After initially being supported by the election of President Cyril Ramaphosa in February, the rand has weakened with its emerging-market peers as rising treasury yields boosted demand for dollar assets. A weaker rand may fuel inflation, making it unlikely the Reserve Bank will be able to cut interest rates again and support an economy that is struggling with an unemployment rate close to 27%. The rand has depreciated about 3% against the dollar so far in May. This is in the context of losses of more than 12% for the Turkish lira and an almost 7% drop in the Me...