The South African rand declined today as poor domestic fundamentals added to concerns about the stalling global economic growth, leading to speculations that South Africa’s central bank may lower interest rates on its next policy meeting.
Gill Marcus, Governor of the South African Reserve Bank, said that the decision to keep rates steady on the last meeting “was not an easy one”. Such comments made traders speculate that the policy makers may yet lower lending rates on the next meeting. Manufacturing indicators in Europe and China worsened, fueling risk aversion among investors. Domestic fundamentals were not supportive for the rand either. The trade balance deficit expanded from 6.7 billion rand in July to 12.2 billion rand in August.
USD/ZAR rose from 8.3640 to 8.4281 as of 12:25 GMT today.
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