EDITORIAL: If 2018 is anything to go by, expect more market and currency volatility in 2019
Wild swings show rand’s vulnerability to bouts of global volatility as it is one of the most heavily traded emerging-market currencies
It’s hard to believe that financial markets are ending 2018 pretty much the same way they signed off in 2017. This time last year, Cyril Ramaphosa had just pipped Nkosazana Dlamini-Zuma to the presidency of the ANC, to the relief of currency markets. Just as a measure of the uncertainty of the time, on December 15 2017, days before Ramaphosa’s victory, the rand’s two-week implied volatility against the dollar jumped to 32%, the most among all major currencies tracked by Bloomberg and the wildest since the height of the global financial crisis almost a decade ago. While Ramaphosa’s victory and the ensuing period of Ramaphoria — a misplaced perception that the change of leader would magically transform SA’s prospects — meant the rand recovered to trade at its strongest levels in almost three years, this was by no means the end of wild swings.
Over the following months, a combination of local policy blunders and global events meant the currency would continue to behave erraticall...
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