Rand holds up for now despite global risk-off tone
The rand has dropped just more than 3% against the dollar so far in December, partially negating the net positives of weaker oil prices
The rand held up relatively well on Tuesday morning, though increasingly skittish global markets clouded its short- to medium-term outlook. The value of the local currency has swung violently in recent days, reflecting investors’ increasing concern about the health of global growth. Concerns were more crystallised in the local bond market, where foreigners sold nearly R11bn worth of local debt on a net basis over the past week. Foreigners hold the biggest share of local bonds at about 40%, rendering them vulnerable to capital outflows when global sentiment takes a knock. The rand has dropped just more than 3% against the dollar so far in December, partially negating the net positives of weaker international oil prices. On Friday, the Automobile Association predicted that retail price of petrol would drop R1.19 a litre and diesel R1.44 in January, but cautioned that the rand remained a wild card. SA is a net importer of petroleum products. The US Federal Reserve will take centre stag...
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