Twin deficits to push rand to new depths, HSBC forecasts

The rand is headed to a new low against the dollar as it faces a double whammy of a worsening fiscal position and a widening current account deficit, boding ill for importers and threatening to drive up prices at a time when the Reserve Bank’s victory against inflation seemed in sight.

In a note to clients this week, HSBC analysts said that while the Bank has tried to tame inflation and made the rand one of the emerging-market currencies that offer attractive real rates, this has not been enough to shield it from external shocks and internal weaknesses…