JOHANNESBURG - The rand dipped in the aftermath of the Sarb’s decision to leave the repo rate unchanged at 6.75% on Thursday, while a downbeat growth forecast weighed on the local unit according NKC Research.
The consensus view was for a hold in the policy stance. The central bank revised its inflation outlook lower to 4.5% for 2019 from a previous projection of 4.8%, while price growth in 2020 is seen at a more moderate 5.1% from a 5.3% forecast previously. The Sarb assesses the rand to be “slightly undervalued” to fundamentals. Our baseline projection places the South African unit at R14.34/$ by mid-year and easing only modestly in H2 to end the year at R14.38/$. At close of local trade, ZAR quoted 0.6% weaker at R14.47/$, after trading in range of R14.37/$ - R14.53/$. ZAR traded weaker overnight. Expected range today R14.35/$ - R14.60/$.
Local bourse tracks global stocks lower
The JSE All Share (-1.7%) fell across the board yesterday, in step with global equity markets. In the overall emerging market sphere, the MSCI Emerging Market Index (-1.3%) traded lower. In local news, Sibanye (+1.8%) and Harmony (+1.4%) bucked the trend on the back of a higher gold price.
Crude prices sink for the second day straight
The Brent oil price extended losses from the previous session yesterday, as trade-war fears dampened demand and outlook, offsetting expectations of potential supply disruptions in the Middle East. At close of local trade, benchmark Brent crude futures quoted 3.5% lower at $67.87pb. Crude prices traded slightly firmer during Asian trade this morning.
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