Rand rallies on the back of increased investor confidence in SA

The decreasing possibility of a ratings downgrade and improved investor confidence has helped the Rand continue its upward surge.

Despite caution from some, folks in general are starting to look at South Africa with hope again… which is apparent if you look at how well the Rand is doing against all the major currencies.

Shortly after the US Fed decided to hike interest rates the Rand hit another surge and on Monday afternoon was trading at R12.71 to the Dollar, the strongest our currency’s been in over 20 months before taking a hit from government’s poor policy at the time, and our inability to effectively deal with global economic changes.

Bloomberg reports that the Rand is currently outperforming more than 30 other markets and, on top of that, the South African economy is steadily moving out of the high-risk zone.

 “The median forecast of analysts in a Bloomberg survey predicts the Rand at R13.70 per dollar by the end of the second quarter. While that may seem bearish, the forecast has dropped from R15.83 a year ago. The last time analysts saw the Rand below 14 per dollar was in October 2015,” the Bloomberg group said, adding that our currency’s also at its’ most stable in 15 months.

That said, it won’t all be smooth sailing for the ZAR. Those in the know are still expecting a crash, with experts increasingly starting to hedge their bets against the currency and not without reason.

Economic experts like those at Nomura believe the current image of SA and our economy is misguided in its optimism and that all it’s take to collapse the currency again is Jacob Zuma and his allies pulling another Nenegate.

Experts at nomure predict a slipping currency as the year goes by, what with the ANC’s elective conference coming up in December. Let’s hope it doesn’t come to that, and that Treasury can hold it together until we find ourselves in a more stable environment.