The Rand has rebounded from its lowest level in four years due to the South African Central Bank leaving its benchmark rate unchanged at 8.5% which was in line with economist expectations.
The Banks governor Gill Marcus revealed that the Bank has revised down its growth forecast for 2013 to 2.6% from its earlier prediction of 2.9%. For 2014 the Bank is predicting an upward forecast to 3.8% from its previous forecast of 3.6%.
Ms Marcus said the Bank’s 2014 revision was due to a “favourable global outlook”, noting, however, that risks to these forecasts remained on the downside. The International Monetary Fund on Wednesday revised down its 2013 growth forecast for South Africa to 2.8%, from a 3% estimate in October.
The currency’s strengthening is expected to be relatively short-lived as investors once more turn their attention to the numerous problems affecting the South African economy. Strikes, a steep fall in exports, political uncertainty, falling growth rates and rising inflation” are among factors that have spooked foreign investors who regard the country as too unstable and risky.
“While we do not expect any huge adjustments to the Bank’s inflation forecast, the impact of the labour unrest may result in modest downgrades of the Bank’s growth forecasts for 2013, while rand weakness and unit labour cost growth could push the inflation trajectory slightly higher,” the Rand Monetary Bank said on Thursday.
Rates correct as of 15:00pm
The South African Rand to Pound exchange rate is currently trading at 0.06995
The South African Rand to Euro exchange rate is currently trading at 0.0826
The South African Rand to US Dollar exchange rate is currently trading at 0.1102
The South African Rand to Australian Dollar exchange rate is currently trading at 0.1052
The US Dollar to South African Rand exchange rate is currently trading at 9.0725
The Pound to South African Rand exchange rate is currently trading at 14.2949
The Euro to South African Rand exchange rate is currently trading at 12.1064
Comments are closed.