The Rand has experienced modest fluctuations against the Pound this morning in the aftermath of the South African Reserve Bank rate decision and the publication of some domestic news for the UK.
At the current exchange rate 1 Pound will purchase 15.0798 South African Rand as of 10:25 GMT
As expected by economists, South Africa’s monetary policy committee opted to hold interest rates, with the repo rate staying at 5 per cent.
The RBSA justified the decision by asserting: ‘While the upside risks to the inflation outlook reduce the scope for further accommodation, a tightening of the monetary policy stance does not automatically follow. This will be highly dependent on how we see the inflation trajectory unfolding in this very uncertain environment.’
The central bank also lowered its growth forecast for South Africa from May’s 2.4 per cent estimate to 2 per cent.
In response to the decision one local trader commented: ‘The lower GDP forecast is a double-edged sword. On the one hand it means that interest rates will be kept lower for longer, while on the other hand, slower economic growth results in less government revenue, so all other things being equal, the fiscal deficit rises.’
The GBP/ZAR exchange rate hit a low of 14.9435 Rand per Pound
After the RBSA announcement the Rand was little changed against the US Dollar.
Meanwhile, a UK report showed that the UK’s budget deficit unexpectedly widened last month. Although the UK is gradually regaining economic momentum the deficit increased as a result of deterioration in the finances of local government.
In the wake of the UK data the Pound softened slightly against the Rand.
Next week investors will be looking to South African inflation rate data.
Current South African (ZAR) Exchange Rates
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.8940 <
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 15.0798 <
The Euro/South African Rand Exchange Rate is currently in the region of: 12.9815 <
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.0893 <
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 7.8287 <
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.5246 <
(Correct as of 10:25 GMT)
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