RATES time-frame
Rand wilts on Fed’s surprise hawkish signals
Fed surprises by signalling an earlier-than-expected increase in its interest rates
The rand suffered with other higher-yielding currencies after the US Federal Reserve (Fed) surprised many markets by signalling an earlier-than-expected increase in its interest rates, which may starve countries such as SA of capital.
Still, higher commodity prices should limit the damage while the Reserve Bank is likely to refrain from hiking rates, because weak consumer demand will constrain inflation and keep it comfortably within its target range, enabling it to keep supporting the economy with a record low repo rate. Sustained weakness in the currency increases the risk that price increases will accelerate by making imports such as oil and commodities priced in international markets more expensive...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.