Rand hits R19 to the dollar as interest rates drag

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The rand is under pressure, with markets expecting a much slower path to interest rate cuts.

The rand weakened back to R19 to the dollar on Tuesday as the greenback gained ground ahead of the US Fed’s interest rate decision this week.

This boosted the rand, bringing it under R18.60 by mid-week – however, the reality that interest rate cuts are still far off quickly turned things around. Analysts started 2024 under the impression that early rate cuts could be coming – but these views have now pushed back the earlier cuts to mid-year at best and after Q3 at worst.

Like most emerging market currencies, the rand often takes its cues from global factors such as US monetary policy.

 

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