There’s no place left to run for South African investors who want to diversify away from the country’s ailing economy — and that may be good news for the rand, according to the top forecaster of the currency against the dollar. SA increased limits on the amounts institutions may invest offshore by five percentage points in February, to 40% for fund managers and 30% for pension funds. Most investors are at or close to those levels, providing crucial support for the rand at a time when emerging-market assets are under pressure from rising US rates, according to Absa strategist Mike Keenan. “That will cap the rand weakness,” said Keenan, who predicts the currency will end the year about 2.5% stronger at R14.25 per dollar. Absa was the most accurate forecaster of the rand versus the dollar in the third quarter, according to data compiled by Bloomberg. The rand has slumped 19% since the beginning of April amid an emerging-market sell-off sparked by rising US rates and a stronger dollar, ...

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