Reasons for rand depreciation

- By FX Markets Staff
- @FXMarkets_
- 11 Apr 2005

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Real rate differentials between South Africa and the US should narrow to around 2.6% by the end of 2005, exacerbated by domestic consumer price index pressures on the back of rising global oil prices and rand weakness. As the attractiveness of South African assets diminishes, the financing of the current account deficit will become a problem, more so as rising global risk aversion is bearish for South African equities.

Rand strength has been paramount to the South African Reserve Bank's (SARB)

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