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South Africa FX 04 August 2021

FX Monthly Chart Book

Shireen Darmalingam

  • The rand has weakened significantly in recent weeks on the back of the unrest in parts of the country amidst the third wave of the virus spreading. It has lost 1.2% against the dollar in July but has since gained ground following the easing of lockdown restrictions to adjusted Level 3 on 25 July. It has weakened by 1.4% against the euro and 2.2% against the pound in July. The rand has traded in a range of R14.16/$ to R14.99/$ in July.
  • We remain cautious about the currency outlook in the near- and longer term given the increased fiscal pressures.
  • We see a modest depreciation in the currency this year on the back of the less supportive terms of trade.
  • We see the rand ending the year at R14,70/$ and averaging R14,55/$.

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