Rand Review Quarterly Bulletin

We are pleased to present the first Rand Review quarterly bulletin for Q1, 2018. The aim of the quarterly is to highlight significant South African Political & Economic events over the past 3 months and take a look at the Rands performance relative year-to-date,

A Summary:

The Rand increased by 4.5% against the USD over the first quarter of 2018. Largely thanks to a much-needed correction that came as a result of the Ramaphosa presidency.

Performance against similar EM currencies. We decided to compare the performance of the South African Rand against the Mexican Peso & Brazilian Real. As you can see below, the ZAR (+4.51%) outperformed both the MXN (0.22%) and the BRL (-4.24%) over the same period.

Notable Political & Economic events from the Quarter

18 January

Lesetja Kganyago, Governor of the SARB elected as International Monetary & Financial Committee, the policy advisory committee of the IMF.

31st January

South Africa’s trade balance for Jan’2018 recorded a -R27.7 Billion Deficit. Marks the first trade deficit since Jan’17 and one of the largest monthly deficits ever recorded.

14th February

Jacob Zuma Resigns

21st February 

SA Government announces tax proposals, VAT Increased to 15%, R57 Billion set aside for free tertiary education over the medium term.

26th February 

SA Cabinet Reshuffle, Nhlanhla Nene named as South African Finance Minister

27th February

Nigeria’s Economy picks up steam, reports 1.9% growth

28th February 

Absa PMI & Standard Bank PMI recorded a Manufacturing Sector Expansion for Feb 2018

1st March

South African inflation down to lowest since March 2015

6th March

SA GDP growth rate for 2017 announced

6th March

SA Annual GDP Growth

19th March

JSE Quarterly Index Changes

26th March 

Moody’s revises South African credit rating outlook

 

28th March

SA Monetary Policy Committee announces Interest rate cut

The Quarter ended with much-needed relief as the SARB reduced South African interest rates by 25 basis points to 6.5%. This now sets the prime lending rate in South Africa at 10% with the hope that future cuts can stimulate the economy by providing relief to consumers. Overall an impressive performance by the Rand and carry trade investors would have done well with the 4.5% Rand appreciation along with favourable local interest rates.

Follow us on twitter for up to date Rand related news. The Rand Review Quarterly for Q2 will be released in July this year. Let us see if the momentum continues.