The rand strengthened as gold advanced on Monday, with demand stoked by global inflation concerns, according to Oxford Economics Africa.
While the latest analyst polls mirror our own expectation for the rate increase cycle to kick off early in 2022, market pricing suggests a shorter timeline to a rate hike – which would be the first since the South African Reserve Bank (SARB) lowered the repo rate to a record low of 3.5 percent.
Assuming an acceleration in price growth to an average of 5.0 percent next year, we expect the repo rate to be increased over three occasions in 2022 to lift the policy rate at end-2022 to 4.25 percent.
At close of local trade, the rand quoted 0.36 percent stronger at R14.72/$, after trading in range of R14.73/$ - R14.86/$. The rand traded firmer overnight. The expected range of the rand against the dollar today is R14.60/$ - R14.90/$.
South African bourse
The JSE All Share (-0.1 percent) ended lower yesterday, as the gains in resources (+0.77 percent) and financials (+0.38 percent) were outweighed by a large drop in technology (-2.75 percent). In the overall emerging market sphere, the MSCI Emerging Market Index (+0.32 percent) traded higher. In local news, DRDGOLD said on Monday that production increased in Q3 2021 as the company’s yields increased.
Brent crude oil
Tight global supply and a recovery in global fuel demand saw the Brent oil price quote 0.27 percent higher at $86.45/pb during yesterday’s local trading session. Crude prices remained on the front foot during Asian trade this morning.
BUSINESS REPORT ONLINE