Cape Town — The rand has strengthened significantly in recent weeks, reaching a 20-month high against the dollar, trading between R17.12 and R17.19, and also gaining against the euro and pound.
This surge is attributed to interest rate cuts by the South African Reserve Bank and the US Federal Reserve.
As reported by IOL, analysts believe the rand could continue its upward trend, driven by positive investor sentiment linked to the success of the Government of National Unity (GNU).
President Cyril Ramaphosa has emphasised the country’s economic recovery and urged for more foreign investment, particularly from the US.
The disparities in wealth and development within and between countries is unjust and unsustainable.
We must continue to strive for equal treatment, opportunity and advancement for all individuals and nations.
— Cyril Ramaphosa 🇿🇦 (@CyrilRamaphosa) September 24, 2024
On Monday, he addressed investors at the New York Stock Exchange, saying that the GNU has boosted confidence in South Africa’s economic recovery.
“The level of confidence has now gone up enormously, and ordinary people, as well, in terms of addressing their social needs, are now feeling that we will be able to address those needs. So, the message that we are beaming to the world is that South Africa’s step and development can be emulated,” EWN quoted Ramaphosa as saying.
Investec’s chief economist Annabel Bishop said the rand has benefitted from the large US interest rate cut last week, while economic analyst, Dale McKinley, said the cuts have created a more positive outlook. He said the GNU has been key to the success, EWN said in a different report.
“I think the secondary reason is obviously because of the GNU and the feeling amongst quite a lot of international business and markets that things are for them, at least, are heading in a positive direction or at least they like the kind of sounds coming out of the government in terms of policy, I think those two things combined is going to see this trend continue probably into the next year,” McKinley said.
Follow African Insider on Facebook, Twitter and Instagram
Picture: Pixabay
For more African news, visit Africaninsider.com
Compiled by Matthew Petersen
