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Economist warn – rand breaching the R20 mark to dollar ‘inevitable’
Concerns are mounting as an economist warned the rand would reach R20 against the US dollar. Last week, the rand hit a record low of R19.80 after the South African Reserve Bank implemented a 50 basis points hike in the repo rate. According to Eyewitness News, the weakening rand poses potential challenges for the country, particularly regarding import prices, as South Africa heavily relies on imported fuel and key crops like wheat and maise.
Azar Jammine, Chief Economist at Econometrix, emphasised the importance of monitoring developments in the US labour market. He stated, “On Friday, we have the significant announcement of the US job creation figures for May. If these figures indicate a strong performance, the dollar is likely to strengthen, leading to a weaker rand. Conversely, if the employment data suggests a significant weakening of the US economy, we could witness the dollar weakening and the rand gaining ground.”
Also read: GBP/ZAR Correction Could Drive The Pound Towards 23.50 Against The South African Rand
Economist Dale McKinley believed breaching the R20 mark against the US dollar is inevitable, stating, “I think it’s inevitable. We’re going to go through the R20 mark. It’s just a question of time – it could happen in the next week or so, but it’s going to happen.”
As the rand continues to go down, economists and market observers closely monitor domestic and international factors that could influence the currency’s movements.
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Picture: Facebook / Tumelo Pantsu TheTourist
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