The South African rand has broken through the psychological barrier of R13 to the dollar, and was trading at R12.93 by 8am on Thursday (16 February) – its strongest levels since August 2015.
This is due to a six day rally as the country’s inflation figures slowed and on the back of positive jobs data.
In a note sent out to clients, Rand Merchant Bank analyst John Cairns said that the expectation is for the rand to make further gains, though the process will likely be slow and unsteady.
Job stats released on Tuesday by StatsSA showed that employment grew by 235,000 in South Africa in the fourth quarter of 2016, while the number of job seekers declined by 92,000 resulting in slight drop in the unemployment rate by 0.6 of percentage point to 26.5%.
On Wednesday, the stats body noted that the headline CPI (for all urban areas) annual inflation rate in January 2017, was 6.6%.
This rate was 0.2 of a percentage point lower than the corresponding annual rate of 6.8% in December 2016.
On average, prices increased by 0.6% between December 2016 and January 2017, StatsSA said.