Bank of America expects rand to give up its recent gains

A recovery that has seen the rand become the best performer among emerging-market currencies in the past month will be short-lived, according to international financial services group Bank of America (BoA), which also warned of a slower than predicted economic recovery in 2021.

In a report published a day after Stats SA recorded its biggest quarterly GDP contraction on record, the US bank said on Wednesday that it had reduced its 2021 growth forecast by almost two percentage points, citing job losses, policy uncertainty and Eskom power cuts, which would “hurt domestic demand for longer”.