Currency News: SARB Tries To Stabilize Rand

Currency News

It’s most likely the Reserve Bank’s monetary policy committee of South Africa will keep interests of its currency on hold this week. Currently, the South African Reserve Bank is led by Lesetja Kgnanyago. For analysts, the head of SARB won’t announce an interest rate cut. Indeed, there’s a high level of uncertainty and risks toward the South African currency. Moreover, the sustainability of inflation drop is at stake. That’s how it went on the spotlight of our Currency News.

Press Release

The currency of South Africa is the rand and it’s currently not in good shape. The uncertainty regarding its exchange rate relegate to inflation as well as the economic growth prospects. Furthermore, other local events as the mini-budget of October, or the ANC’s elective conference in December make the future of the rand even more uncertain.

Thus, they preferred to put the interest rate on hold. The plunge of the rand on Thursday was only another sign of the rand’s vulnerability. Plus, a cut would weaken even more for South Africa regarding issues as global investor sentiment increases. This would lead the Bank to weigh up competing forces. Finally, what results from the reserve bank meeting is that South Africa is unlikely to make its currency go through an interest rate cut. 

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