SA rand takes hit after interest rate cut
JOHANNESBURG – The South African Reserve Bank (SARB) surprised the market this morning by cutting interest rates by another 100 basis points after recently indicating that it would not look to cut interest rates any further during 2020.
Bianca Botes, Executive Director at Peregrine Treasury Solutions, said, “Even though SARB has not indicated it formally, we can assume that this move comes as a reaction to the extension to the lockdown and the anticipated effect that it will have on the South African economy.
It also indicates to us that the SARB is not too concerned about the inflationary pressure that this could cause, given the low level of demand that we are currently witnessing.”
It also indicates to us that the SARB is not too concerned about the inflationary pressure that this could cause, given the low level of demand that we are currently witnessing.”
The rand reacted negatively, weakening 1 percent back to the R18.20/$ level, after trading at around R18.00 following positive Chinese trade data this morning.
Source: iol.co.za
