{"id":284550,"date":"2018-11-16T07:59:17","date_gmt":"2018-11-16T05:59:17","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=284550"},"modified":"2018-11-16T07:59:17","modified_gmt":"2018-11-16T05:59:17","slug":"rand-boosted-by-brexit-chaos-but-bets-still-on-for-a-rate-hike-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/284550\/rand-boosted-by-brexit-chaos-but-bets-still-on-for-a-rate-hike-in-south-africa\/","title":{"rendered":"Rand boosted by Brexit chaos but bets still on for a rate hike in South Africa"},"content":{"rendered":"
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The chaos created by Brexit has given the rand a welcome boost, following a steady decline of the local unit earlier this week.<\/p>\n

UK Prime Minister Teresa May and her peers battled it out as she fought to save the draft Brexit deal, while many of her colleagues who initially supported Brexit resigned in protest, noted Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.<\/p>\n

“If anyone thought Europe was going to give the UK an easy divorce, they were certainly mistaken. The Brexit fiasco has set a worrying precedent for other countries that were potentially leaning towards exiting the European Union (EU).<\/p>\n

“With no major events taking place on the local side, the rand\u2019s rally is rather the result of a stumbling sterling which lost 2.3% against the local unit as May gave her speech last night.”<\/p>\n

Botes said that as the hype around Brexit dies off, the rand could be impacted the Parliamentary approval for the amendment of Section 25 of the Constitution to more expressly make room for land redistribution without compensation.<\/p>\n

“This will be an interesting event to watch unfolding over the next few weeks, as many opposition parties and civil society organisations are arguing that proper procedure has not been followed, and that the decision should be challenged at the Constitutional Court,” Botes said.<\/p>\n

Oil prices also came under pressure after rebounding earlier this week, with US President Trump urging OPEC not to cut supply, Peregrine Treasury Solutions said.<\/p>\n

The rand held its ground in early trade on Friday, trading at R14.16\/$, with the day’s focus on how the Brexit deal pans out.<\/p>\n

“We expect to see some volatility, with an anticipated range of R14.15 to R14.35. However, it would be wise to be cautious of the rand\u2019s rally, as any negative move by local government inviting further policy uncertainty could trigger a refreshed bout of weakness,” Botes said.<\/p>\n