The US Dollar Rand (USD/ZAR) exchange rate tested multi-year highs around the 19.8298 level this week, as the South African currency extended its decline on FX markets.
For reference, 1 USD currently trades at 19.6599 ZAR.
Foreign exchange analysts at Credit Agricole point to a tumultuous time for the South African Rand (ZAR) due to various influences including the evolving stance on the South African Reserve Bank (SARB)’s monetary policy, recent depreciation of the ZAR, and South Africa’s structural and economic difficulties.
The Hawkish Shift in SARB’s Monetary Policy and the Impact of Inflation
According to Sebastien Barbe, Global Head of EM Research and Strategy at Credit Agricole, there has been a shift in the SARB’s monetary policy, which has moved towards a more hawkish stance.
This has been driven by trends in inflation that showed a peak in July and a…