Rand gains as markets cheer US poll results
Further gains may ease pressure on the Reserve Bank to raise interest rates later in November
The rand climbed to its strongest level in more than two months against the US dollar as local assets got caught up in a wave of optimism that boosted riskier assets after the US midterm elections delivered a divided Congress. Further gains may ease pressure on the Reserve Bank, which has cited currency weakness among the biggest risks to its inflation outlook, to raise interest rates later in November. With international oil prices having eased from their highest levels in more than four years, the rand’s gains may also set the stage for a cut in petrol prices in December. Regarded as the proxy of sentiment towards emerging markets, SA’s currency jumped as much as 1.6% to R13.88 to the dollar, its best level since August 10, before trading at R13.97 by 5.40pm. Since dropping to a 2018 low of R15.70 in early September, the rand has gained 11%, reducing the risk that it will add to inflationary pressures or prompt a more hawkish stance from the Bank’s monetary policy committee, which...
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