The rand has gained about 3% since March 28, the day before Moody’s Investors Service decided against issuing a scheduled review of SA’s rating. That has made it the best performer among major currencies. At the bottom, Turkey’s lira has dropped 1%. This might be good news that indicates the investment community is beginning to differentiate between emerging markets, rather than seeing them as a homogeneous grouping that move in tandem irrespective of local differences. The SA Reserve Bank alluded to this after the last meeting of its monetary policy committee, in which it decided to keep the repo rate unchanged at 6.75%. Whether that was the correct decision, taking into account how the inflation outlook has improved since it raised the rate by 25 basis points in November, is something that will be subject to debate for some time.

In previous meetings the Bank had made much of actual and potential volatility in emerging market currencies and how this could affect the value of...

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