The rand stabilised after weakening somewhat during early trade as an underwhelming SONA failed to boost investor confidence according to NKC Research. Picture: Karen Sandison/African News Agency(ANA)
The rand stabilised after weakening somewhat during early trade as an underwhelming SONA failed to boost investor confidence according to NKC Research. Picture: Karen Sandison/African News Agency(ANA)

Rand remains on a steady footing

By Staff Reporter Time of article published Feb 15, 2021

Share this article:

JOHANNESBURG - The rand stabilised after weakening somewhat during early trade as an underwhelming SONA failed to boost investor confidence according to NKC Research.

External tailwinds continued to offer support, with the local calendar to be dominated by the budget speech later this month.

Thinner global liquidity conditions – owing to market closures in China and the US this week – may render the risk-sensitive rand more prone to volatility ahead of the pivotal budget address.

In terms of the global backdrop, slower-than-hoped vaccine roll-out and still-high Covid-19 cases in many parts of the world suggest that global GDP growth in Q1 will be even weaker than the fairly lacklustre end to 2020.

The rand traded at 14.44 against the dollar.

Recovery progress

As expected, the second wave of Covid-19 infections that struck at the end of last year and the subsequent renewed restrictions have had a negative effect on South Africa’s economic recovery.

The NKC Research recovery tracker for the local economy declined by a further 3.1 pts to 69.1 pts in January, after falling by 3.2 pts to 72.2 pts in December.

The biggest driver of the deterioration in economic recovery was the health category. The indicator fell by 4.6 pts to 2.2 pts as the country witnessed record numbers of daily cases and fatalities reported during December.

That being said, the number of new cases reduced considerably during the second half of January; so much so that the president eased restrictions. This resulted in a 0.5 pt improvement in the health category, to 2.7 pts in January. Nevertheless, on aggregate, the category still weakened by 4 pts during the past two months.

BUSINESS REPORT

Share this article:

Related Articles