Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Public money, private plans: MPs demand Post Office transparency

      13 June 2025

      Coal to cash: South Africa gets major boost for energy shift

      13 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      10 red flags for Apple investors

      13 June 2025
    • World

      Yahoo tries to make its mail service relevant again

      13 June 2025

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025

      Trump tariffs to dim 2025 smartphone shipments

      4 June 2025

      Shrimp Jesus and the AI ad invasion

      4 June 2025

      Apple slams EU rules as ‘flawed and costly’ in major legal pushback

      2 June 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Current affairs » Top forecaster sees more pain for rand

    Top forecaster sees more pain for rand

    By Agency Staff11 July 2018
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    The rand’s comeback against the dollar this month will run out of steam as US rates rise and the trade war between the world’s two biggest economies weighs on global growth, according to the most accurate forecaster of the South African currency.

    The rand has gained 2.2% against the greenback since the beginning of July to around R13.39/US$ on Tuesday. Any further advance should be seen as a dollar-buying opportunity, according to Rabobank, which tops Bloomberg’s latest ranking for rand-dollar forecasters and predicts the South African currency will end this quarter at R14.20, a slide of about 6%.

    “The rand is under renewed selling pressure amid fading positive market sentiment,” said Rabobank’s London-based emerging markets currency strategist Piotr Matys, whose forecast for the currency is more bearish than the median of R13.46 in a Bloomberg survey. “The prospect of a full-scale trade war remains the main risk factor for the rand and its peers.”

    The rand is under renewed selling pressure amid fading positive market sentiment. The prospect of a full-scale trade war remains the main risk factor for the rand and its peers

    South Africa’s currency slumped 14% in the second quarter amid a sell-off of emerging-market assets, with foreigners deserting the country’s bond market at a record pace. That’s making it more difficult for President Cyril Ramaphosa, who replaced the scandal-tainted Jacob Zuma in February, to deliver on promises of attracting investment and stimulating growth.

    While central banks from Argentina to Turkey have tightened policy to support their currencies, South Africa’s Reserve Bank stayed put after cutting its benchmark in March to 6.5%. That narrowed the differential over the US policy rate to the lowest in 11 years, reducing the relative attractiveness of South African assets. Bond and equity outflows may accelerate as the Federal Reserve continues to hike, Matys said.

    Foreign investors have sold a net R36.5-billion in the year to 6 July, according to JSE data. The rand weakened 0.7% to R13.43/$ by 8.32am in Johannesburg.

    Tit-for-tat tariffs between the US and China have also hit the the rand and other South African assets. The nation’s reliance on raw-material exports makes it particularly vulnerable to any slowdown in global growth due to a trade war. The Bloomberg Commodity Index has plunged 11% in the past month as prices of metals including copper, gold and platinum fell.

    ‘Vicious cycle’

    “The vicious cycle may still accelerate in the second half of the year, which would have serious negative consequences for emerging markets,” Matys said.

    For the rand, much will depend on Ramaphosa’s ability to implement his reform agenda, Matys said. Among his immediate challenges are keeping populist elements within his party at bay and investors happy while crafting agreements on land reform and ownership of mines.

    He also has to consolidate public debt and root out mismanagement at state-owned companies including Eskom. But the credibility of South African institutions gives it a head start over Turkey, where President Recep Tayyip Erdogan’s latest power grab is spooking investors, Matys said.

    “At least South Africa has credible policy makers, led by President Ramaphosa, who are fully committed to implement structural reforms, which cannot be said about Turkey,” he said.  — Reported by Colleen Goko, with assistance from Wei Lu, (c) 2018 Bloomberg LP



    Piotr Matys Rabobank
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleDStv Now to get 4K streaming
    Next Article This is Absa’s new logo

    Related Posts

    Rand weakens as load shedding returns

    16 October 2019

    Rand plummets most in five years

    10 November 2016

    SA’s sins forgotten as rand surges

    2 August 2016
    Company News

    Huawei Watch Fit 4 Series: smarter sensors, sharper design, stronger performance

    13 June 2025

    Change Logic and BankservAfrica set new benchmark with PayShap roll-out

    13 June 2025

    SAPHILA 2025 – transcending with purpose, connection and AI-powered vision

    13 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.