The rand pulled back from the psychologically important R14 to the dollar level, lifted by a return of risk-on global trade, and some good news locally. Inflation rose 4.4% in May on an annualised basis, Statistics SA said earlier, with lower food prices helping to ensure the print missed a consensus forecast of 4.6% for the month. This has helped moderate fears that the Reserve Bank will be forced to raise interest rates in 2018 in order to protect the rand and ward off inflationary pressure, while a return of investor appetite for risk assets also assisted the currency. Global markets are recovering from three days of sharp sell-offs, but analysts warn that risk factors remain. Many of SA’s emerging-market peers had recently increased interest rates — although for country-specific reasons — leaving the local currency vulnerable, said Rand Merchant Bank analyst Isaah Mhlanga. The rand was the second-worst performing currency since Monday, after the Turkish lira, "but having to comp...
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