USD/ZAR: Rand to benefit only short term at best on SARB’s hawkish-sounding statement – Commerzbank
The South African central bank (SARB) meets today. Economists at Commerzbank analyze how the monetary policy decision could impact the Rand (ZAR).
If SARB does not meet expectations, the ZAR might face further losses
“The Rand is suffering in a risk-averse environment, currently dominated by the US debt debate, and from persistent home-grown problems. The list of those is long and includes the energy crisis, a poor growth outlook and high unemployment as well as questionable foreign policy decisions. This is the government’s responsibility.”
“If the SARB today hikes the key rate to 8.25% as widely expected and keeps the door open for further rate hikes in a hawkish-sounding statement the Rand is likely to benefit only short term at best. A lot seems to have been priced in already. If it does not meet these expectations the ZAR might face further losses in our view, which the SARB is unlikely to risk though.”