SA’s currency undervalued - economist
Boksburg - The South African rand is significantly undervalued and should be trading at R9 to the dollar, said Annabel Bishop, the chief economist at Investec, on Friday.
Bishop made the remarks during an economic policy dialogue hosted by the Department of Trade and Industry.
The rand was trading at R12.32 to the dollar at 11am after falling to 13-year lows over the past week.
Bishop said the currency was undervalued and should be trading significantly stronger.
Rand weakness has been driven largely by the strengthening of the dollar, sparked last Friday by jobs numbers from the United States which proved stronger than expected and that sparked a sell-off from emerging market assets.
This is partly why the rand has weakened specifically against the dollar, and not against the euro and pound.
Bishop said the biggest risk to the rand was prolonged load shedding, as well as protracted strike action.