South African Rand Weakens Ahead of Reserve Bank Decision
Currency under pressure as investors brace for possible policy shift amid inflation and global headwinds.
The South African rand slid on Thursday, September 18 to 19.25 against the U.S. dollar as markets awaited a key interest rate announcement from the South African Reserve Bank (SARB).
While consumer inflation slowed slightly in August, lingering concerns about food and fuel prices? coupled with global economic uncertainty, have kept investors cautious.
The SARB has maintained one of the highest policy rates on the continent in an effort to tame inflation, but business leaders warn that high borrowing costs are choking growth and investment.
Economists are divided over the bank’s next move. Some expect a hold to avoid worsening economic stagnation, while others argue a rate cut is overdue given weakening domestic demand.
“The SARB is walking a tightrope,” said Sipho Ndlovu, an economist at Standard Bank. “They must balance inflation control with the need to stimulate jobs and growth.”
The rand’s performance will also be influenced by global factors, including U.S. Federal Reserve signals and commodity price swings.
With South Africa facing persistent power shortages and unemployment above 30%, policymakers remain under pressure to stabilise both the economy and investor confidence.
Source: Reuters
