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Rand in recovery mode after IMF raises SA growth forecast

Rand in recovery mode after IMF raises SA growth forecast

The rand targeted a recovery in early trade on Friday, having surrendered nearly 3% to the dollar on Thursday, amid political uncertainty in the US, which forced investors to seek safe-haven assets.

News out of Brazil, where president Michel Temer is accused of corruption, also knocked emerging market currencies.

By 10h00, the rand firmed by a percent, to R13.27. It also made against against the euro and UK pound.

On Thursday, the International Monetary Fund (IMF) lifted South Africa’s growth forecast for 2017, from 0.8%, to 1%.

The IMF pointed to recoveries in the agriculture and mining sectors, but warned that perceptions of policy uncertainty pose a downside risk.

South Africa’s Treasury expects growth of 1.3% this year, up from 0.3% in 2016.

General Motors’ (GM) announced that it will cease operations in South Africa as manufacturing in South Africa would not provide the company with the returns required to support its global strategies and investments.

Marius Croucamp, a spokesperson for trade union, Solidarity, warned that GM’s withdrawal from the South African market comes as a ripple effect of Ppresident Jacob Zuma’s ill-considered reshuffling of the cabinet in April this year.

“We are beginning to see the negative impact of this downgrade. Fewer investments and lower economic growth are but the start,” he said.

He said that Solidarity is apprehensive about an exodus of other larger companies as a result of the poor political and economic policies that are currently in place. “The economic and social consequences of GM’s withdrawal give cause for major concern,” Croucamp said.

Read: General Motors pulls out of South Africa

BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
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  • Danie

    This article is making premature claim. The graph at https://www[dot]xe[dot]com/currencycharts/?from=USD&to=ZAR&view=1W is telling a different story of the past week. Or may I just misinterpreting the graph.

    • HarD

      I would still like to know what has transpired since a committee was set up by the Borse to investigate those who traded in futures before and after the reshuffle. Billions was made and we deserve to know who the culprits are – who is pulling the strings.

      • Danie

        Good Question. Probably no answer will be given. Ever.

      • John Phoenix

        Look to investec/rmb, and possibly further north (al la UK based companies) can’t guess exactly, but that’s where they should start looking.

  • Jacques

    “Rand in recovery mode” In which universe are you living in?

    • Cnut Stunning


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