After a dismal year end last year in 2018. This was due to worries over the country’s sovereign credit ratings, power supply interruptions and when the Rand was the fourth worst performing currency against the dollar and among the most volatile.
But even with all of that. The Rand remains a favourite for investors chasing high yields and willing to risk short-term losses for sizeable net returns, reported Money Web.
This was further proven recently when South Africa’s (SA’s) rand rose to a near one-week high against the dollar on Thursday January 24 as risk-taking crept back into markets. On Friday, January 25 the rand was at R13.69 to the dollar, R17.98 to the pound and R15.50 to the euro.
According to Old Mutual Investment Group chief economist, Johann Els as reported in Business Tech, he expects the rand to strengthen again in 2019. Even if this is a short-term event, he believes it could have significant impact on the likes of confidence and inflation.
“This is within the context of a weaker dollar and more balanced, synchronised growth, including better emerging markets, as well as a pickup in cyclical SA growth and stable and low local inflation,” he said.
“A good ANC election outcome and policy reform would lead to a stronger rand, based on improved confidence, and it could quite likely reach R12 to the dollar in 2019, with increased rand stability over the next few years if growth picks up in the direction of 3.0% to 3.5%.”
Volatility in the rand has the potential to pick up as anticipation mounts ahead of the budget in February and May elections, reported Money Web.
