One of the big factors that has helped to support the rand exchange rate, despite SA’s efforts to shoot itself in the foot politically and economically, is a favourable global environment. US monetary policy in particular has favoured a continuing wash of capital inflows into emerging markets, SA included. Although the era of ultra-low yields is coming to an end, with the US Federal Reserve having begun to raise interest rates and reduce its balance sheet, the Fed’s careful pace has kept the emerging market party going. That was affirmed again last week when the Fed open market committee set in play a plan for reducing the bloated $4.5-trillion balance sheet the Fed built up in the wake of the financial crisis as it implemented quantitative easing. At the same time, Fed chairwoman Janet Yellen signalled that she would probably lift short-term interest rates for the fifth time since the financial crisis. This time, it has been nothing like the "taper tantrum" of 2013, when the Fed fi...
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