The rand, which is on track for its best start to a year in at least three decades, will probably hold onto its gains in the short term before weakening again, an economist says. The local currency strengthened to below R13.60 to the dollar on Monday morning for the first time since August 2018, though it slipped back to R13.70 in late trade. According to Bloomberg data, the rand had gained 5.7% in January by Monday morning — the most since at least 1989 and more than any other emerging-market currency.

The rand and its emerging-market peers have benefited from a more cautious US Federal Reserve — some analysts now expect the central bank to keep interest rates on hold in 2019 — and optimism that the US and China will strike a trade deal. The local currency was also among those that were “particularly hard hit” in 2018, which suggests that recent buying by foreigners is “opportunistic rather than fundamentally driven”, says Stanlib chief economist Kevin Lings. “I think in the ...

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