The rand will weaken in 2011, but will not be weaker than 7.30 against the US dollar, said Gina Schoeman, the leading economist for SA at Absa Capital, at the bank's second-quarter 2011 economic update presentation on Thursday.
Most economists forecast the rand to weaken to about 8.00 to the dollar amid significant capital outflows in 2011.
The rand strengthened and remained strong for most of 2010 amid strong capital inflows into emerging market economies with higher yields.
There has been some capital outflow since the beginning of the 2011.
Schoeman said the portfolio outflows would go some way in weakening the rand, but that terms of trade were a good reason why the rand would not be weaker than their forecast level.
SA's terms of trade had improved significantly, Schoeman said, adding the stronger merchandise trade inflows would go some way in offsetting portfolio outflows, generating some rand resilience. - I-Net Bridge