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28 May 2014
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Recent Rand strength may not prove durable

28 May 2014

The placid Global atmosphere has been equally beneficial for equities, with the most global industries at record or multiyear highs. At home this groundswell of positive sentiment has pushed the JSE to touch fresh highs and seen good flows into SA, once again providing support to the rand.

At the same time several factors paint a fairly rosy picture of our currency outlook in the short term, the economy still exhibits pronounced macro vulnerabilities.

Growth remains weak and nowhere near the job creating requirements outlined in the NDP, large twin deficits glower in the background, and inflation is accelerating. The platinum strike has done nothing for our already anaemic trade data, and weaker figures suggest that our current account is likely to deteriorate.

Andre Delport

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