Rand wobbles after student pro

Rand wobbles after student protests

Last week was characterised by the student protests across the nation. The Rand was at a low against the dollar as the student protests over tuition fees put a negative spin on investor sentiment. The Rand fell by nearly 2% against the US dollar mid-week, which tied in with the protests occurring outside of Parliament.

Rand wobbles after student pro

There is now more pressure on the South African Reserve Bank (SARB) to keep national debt in check. Thus far, the SARB’s plan has relied on curbing national debt by lowering expenses. This is likely to continue as the economic growth forecast, announced in the Midterm Budget Speech last week, has been reduced from 2.0% to 1.5%. The SARB is aiming to keep inflation levels between 3%-6%. The September print came in at 5.3% last week.

Growth in China’s industrial sector remained sluggish last week, putting commodity currencies under pressure. While the Rand recovered from three week lows, thanks to China cutting rates for the fifth time this year, traders are expecting this reprieve for the Rand to end soon. It is likely that currency will come under pressure after the US Federal Reserve’s monetary policy meeting this week.

What to look out for this week? The unemployment rate data is set to be released tomorrow. This is a leading indicator of the state of South Africa’s economy. If the rate released is high, it will indicate a lack of expansion within the labour market. An increase will have a negative effect on the Rand.

The SARB will release the September M3 and private sector credit extension data on Thursday at 08:00. An acceleration of the M3 money is seen to be positive while a decrease is negative.

Finally, SARS will release the September trade balance figures on Friday at 14:00.

-Kimberly-Kate Wain

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