{"id":313010,"date":"2019-04-24T11:31:07","date_gmt":"2019-04-24T09:31:07","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=313010"},"modified":"2019-04-24T11:31:07","modified_gmt":"2019-04-24T09:31:07","slug":"what-could-happen-to-the-rand-after-the-2019-elections","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/313010\/what-could-happen-to-the-rand-after-the-2019-elections\/","title":{"rendered":"What could happen to the rand after the 2019 elections"},"content":{"rendered":"

Financial analysts are currently awaiting the results of South Africa’s national elections with bated breath, as the country recovers from a weaker rand, load shedding and high oil prices.<\/p>\n

Speaking to CNBC Africa<\/a><\/strong>, Tsitsi Hatendi-Matika, head of Retail Investment Specialist at Absa’s Wealth and Investment Management, said that the rand is currently predicted to be on track for the R14\/dollar mark after the elections.<\/p>\n

However, she cautioned that this does not account for this week’s spike in oil prices.<\/p>\n

“We know this oscillates between the high-end and the low-end but around these levels, we think it as fair value,” she said.<\/p>\n

However, Hatendi-Matika said it was difficult to guess exactly which way the elections will turn out, as polls typically don’t account for the 8 million South Africans who opt not to vote.<\/p>\n

In the event that elections provide an unexpected result – such as a president who doesn’t get the majority vote – the rand’s levels could differ dramatically, she said.<\/p>\n

“We had a meeting about this last week and it was noted that ‘black swan events’ by their nature cannot be anticipated.<\/p>\n

A black swan is an event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict.<\/p>\n

“Should things go extreme and not how the market expect them to go – you could see the rand head to R15 or even R16\/dollar<\/strong>.”<\/p>\n

High oil prices\u00a0<\/strong><\/p>\n

South Africa is set to head into elections with the added burdened of high oil prices and a weaker rand.<\/p>\n

Washington announced a new plan on Monday (22 April) to impose sanctions on countries that import Iranian oil by no longer granting exemptions, and effectively withdrawing from a 2015 agreement.<\/p>\n

This sent international oil prices to their highest levels in 2019, with the spot price of Brent crude hitting just under $75 a barrel, and WTI at $65.70.<\/p>\n

Hatendi-Matika said that in the short-term these high oil prices will feed into fuel price increases which will subsequently feed into food price increases.<\/p>\n

Ultimately this may also have an impact on South African interest rates and could even result in job losses, she said.<\/p>\n

\n

Read: What shook the rand<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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