Rand holds up despite deepening global market sell-off

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The rand held up on Friday morning, out of sync with other emerging-market currencies, which sagged amid global risk aversion.

On balance, the local currency has been relatively resilient during the current bout of risk-off trade, which started a week ago.

Analysts say local political dynamics have cushioned the rand against the blows of negative sentiment that had permeated global markets.

The Dow Jones Industrial Average sagged a hefty 4% on Thursday night, a move that would ordinarily hit the rand as a highly liquid emerging market currency.

In SA, the question is no longer if, but when, President Jacob Zuma will step down, with the ANC believed to be working out the final details of his departure.

Zuma’s exit will allow his deputy, Cyril Ramaphosa, to take over until 2019 when general elections will be held.

“The political transition will close the gap between two centres of power and will build the momentum we saw at the start of the year,” ETM Analytics analyst Halen Bothma said, referring to the governing party.

“It will give Ramaphosa a platform to roll out plans to fix the economy and boost both business and consumer confidence.”

At 9.30am, the rand was at R12.0961 to the dollar from R12.1675, at R14.8405 to the euro from R14.9083, and at R16.9018 to the pound from R16.9356. The euro was at $1.2268 from $1.2248. – BusinessLive

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