Rand continues to trade at its weakest level

The rand continues to trade at its weakest level since January this year at R 15, 63 to the dollar.

It weakened by nearly 1.0% on Thursday, following the Reserve Bank’s decision to raise interest rates by 0.25%.

A raise in interest rates usually strengthens the rand, but the rand is in part weakening in sympathy with the Turkish lira, which weakened by more than 3% on Thursday.

This comes after Turkey’s central bank defied inflation of 20% to cut interest rates by another 1%.

However, emerging markets currencies are also still at the mercy of a stronger dollar, which usually weakens currencies such as the rand.

The expectation that the Reserve Bank will only gradually increase interest rates going forward, is also preventing the rand from strengthening on Friday morning.

Interest rates

South African Reserve Bank’s Monetary Policy Committee has decided to raise the repo rate by 25 basis points to 3,75%.

In the video below, economists give analyses: