Rand pushes past R14/$ as volatility eases
Analysts are surprised by currency’s stability, which reflects that many risks are already priced in
The rand led gains among its emerging-market peers on Wednesday, pushing past the R14/$ level for the first time in two months. The local currency has now firmed about 5.4% from its 2019 low reached in late March, with easing volatility in the rand possibly a sign of confidence in the government’s ability to push its postelection reform agenda, analysts said.
The local currency has stabilised since Moody’s Investors Service delivered a favourable opinion on SA’s credit rating earlier in April. Emerging-market currencies have recently been boosted by signs of progress in the trade talks between the US and China, and were firmer on Wednesday in anticipation of US Federal Reserve minutes later that were expected to be dovish. Domestically, markets are now focused on SA’s weak economic growth rates and an expected postelection improvement in politics, policy, and therefore confidence, said Old Mutual Mutual Investment Group chief economist Johann Els. “Markets tend to look forwar...