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The rand was in a sweet spot on Monday morning, after SA successfully defended its investment grade status.
Not only did Moody’s Investors Service preserve the country’s investment grade status, the ratings agency also upgraded the outlook on SA from negative to stable.
“The challenge to SA now is to wisely use the time granted by Moody’s to continue to work toward a more transparent and predicable policy framework,” said Raymond Parsons, an economist at the North-West University School of Business and Governance.
The rand was trading at R11.65/$, marking a big improvement from the lows of R12.11 it was a week ago.
With Moody’s ratings review out of the way, speculation is rife that Reserve Bank will cut the repurchase rate when its monetary policy concludes a three-day policy meeting on Wednesday.
Economists surveyed by Reuters expect the committee to cut repo rate by 25 basis points.
The rand also took advantage of a weak dollar, which was partly hobbled by the concern of a trade war between the US and China, the two largest economies.
Markets in general were still twitchy in early trade, with participants seemingly not sure what to make of the developing trade war between the US and China and its implications on the global economy
At 8.26am, the rand was at R11.6441 to the dollar from R11.6818, R14.4032 to the euro from R14.4277 and at R16.4860 to the pound from R16.5226
The euro was at $1.2369 from $1.2351. – BusinessLive
Bongani Ndlovu