ZAR surrenders gains
“The government has announced relief measures including reinstating a monthly welfare grant of ZAR350 for the poor until the end of March and support for uninsured businesses
to help dampen downside risks for the economy. There have been encouraging signs recently that the third wave of COVID in South Africa has passed the peak allowing the
government to begin easing restrictions. The riots have encouraged the SARB to be more cautious over tightening monetary policy. The SARB is now only forecasting one
rather than two rate hike towards the end of this year. We expect higher commodity prices and yields on offer in South Africa to prevent a further sharp rand sell off.”
“The government has announced relief measures including reinstating a monthly welfare grant of ZAR350 for the poor until the end of March and support for uninsured businesses
to help dampen downside risks for the economy. There have been encouraging signs recently that the third wave of COVID in South Africa has passed the peak allowing the
government to begin easing restrictions. The riots have encouraged the SARB to be more cautious over tightening monetary policy. The SARB is now only forecasting one
rather than two rate hike towards the end of this year. We expect higher commodity prices and yields on offer in South Africa to prevent a further sharp rand sell off.”