Yesterday the SARB cut its repo rate by 25bp. This was widely expected by the market however the SARB turned slightly dovish citing their limited capacity in the face of fiscal deterioration.
QPM saw repo rate at 3.50% by end of the year and then slightly higher by the end of 2021 meaning this could likely be the end of cuts for SA. This takes the total cut in 2020 to 300 points.
The rand is 0.31% weaker on the 16.7000 mark against the softer greenback having weakened 1% on Thursday.
The move back to R16.70/USD, can be partially ascribed to dampened sentiment after US initial jobless claims recorded an increase for the first time since March and a continuing rise in infections in a number of US states. Moreover, US-China tensions continued to escalate.
In the week ahead, with the rand expected to trade in a range R15.90/USD – R17.50/USD, R18.60/EUR – R20.20/EUR and R20.50/GBP – R22.10/GBP.
View Source Article