South Africa’s rand expected to weaken futher in 2019

Worst-case scenario: the rand could hit R24 to the dollar
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South Africa’s rand will lose over 3 percent of its value in volatile trade against the dollar this year.

This is according to a poll of market strategists.

The rand earlier today traded at 13.91 against the dollar, 0.5 percent firmer than its previous close.

Economists forecast the rand will weaken by over 3 percent to 14.43 against the dollar towards the end of this year.

Forecasts for end-2019 were also in a fairly wide range, from 12.63 to 16.50.

The South African Reserve Bank is also expected to hike the repo rate by a quarter of a percent to 7 percent in May around the time the country is due to hold a national election.

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According to Hugo Pienaar, an economist at the Bureau for Economic Research, a combination of weaker global growth in 2019 and a lack of real domestic reform momentum, even after the elections, should keep the rand at a level that is undervalued.

This fall in currency value is expected to be cushioned by wavering expectations on how high U.S. interest rates will go.

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