The rand could fall to R19/$

[rpm]

The rand could fall to R19/$ – economist

The rand could be between R18.37 and R19 against the dollar by the end of 2016, Peter Attard Montalto, emerging markets economist at Nomura, said on Friday.

 

[HavocXphere]

At this pace it'll hit 20 before Xmas never mind 19 by year end.

The rand could be between R18.37 and R19

Thank goodness. For a second there I though R18.36 was a possibility as well. But R18.37 is OK. Close shave.

 

[Azg]

At the rate the rand is falling R19 looks like a best case scenario.

 

[Milano]

Extremely unstable presidency could see further steep falls by next month.

 

[Seriously]

Nigeria is forecast to expand 4.6% after growing by 3.3% last year, while South Africa is expected to advance only modestly to 1.4% growth from 1.3% in 2015.

We need the nigerians to rule this country.

 

[MickZA]

Things are looking up, they were forecasting R20 to the $ yesterday - http://mybroadband.co.za/vb/showthread.php/792219-R20-to-the-US-dollar-is-on-the-cards

 

[Bryn]

The 1-year minimum for our currency is R11.27/$. The maximum is R16.32/$ (what it is right now). That's a devaluation of 44.8% in 12 months.

If it happens again we'll be at R23.63/$.

 

[DLComputer]

AND this made me disable the Rand function on my site, now only $'s. If I did not disable this and my admin side of things updated to late I would have lost a bit of money.

 

[krycor]

I reckon it won't get there.. Before end of 2016, the US interest cycle will stall or be reversed because the tech bubble bursts amongst other smaller bubbles. Not a huge set back for them but yah big enough to send money back to emerging markets

 

[Jings]

What would be the result should government implement a rand freeze?

 

[Jola]

What would be the result should government implement a rand freeze?

You need massive currency reserves to even think about that. We don't.

The only thing that they can do is to increase interest rates, which they don't want to do.

 

[Jings]

You need massive currency reserves to even think about that. We don't.

The only thing that they can do is to increase interest rates, which they don't want to do.

There were rumours and denial regarding a "rand freeze" back in 2009. Investors took it seriously because we saw a dip in the rand when the "rumour" broke out. Does it mean we had huge reserves in that point in time?

 

[HavocXphere]

What would be the result should government implement a rand freeze?

Not in a million years.

Its against stated policy and impossible from a practical PoV - especially with the recent wild fluctuations. You can only really peg a currency if its reasonably stable anyway and you've got massive reserves. Alternatively you need to be economically integrated - like the Lesotho currency is vs the ZAR.

What would be the result? It would be a failed attempt & quick retreat to floating rate.

 

[diabolus]

That sounds very conservative to me, if we are downgraded to junk status (which is more and more likely) the rand is going to reach those levels well before the end of the year.

Add to that the fact the rand drops 5-10% everytime Zuma opens his mouth, it is also elections this year = lots of BS coming out of zuma's mouth on a constant basis = major drop in the rand.

Then there is China where Zuma has hedged all of SAs economy on , and it's clear China is slipping and the rand is slipping with them...

 

[Jings]

Not in a million years.

Its against stated policy and impossible from a practical PoV - especially with the recent wild fluctuations. You can only really peg a currency if its reasonably stable anyway and you've got massive reserves. Alternatively you need to be economically integrated - like the Lesotho currency is vs the ZAR.

What would be the result? It would be a failed attempt & quick retreat to floating rate.

Thanks for that. At the point it seems there is no way around the rand's decline.

 

[HavocXphere]

Thanks for that. At the point it seems there is no way around the rand's decline.

Well I'd rather have the zar decline than gov attempting to artificially prop it up.

It'll stabilise eventually. Still has quite a bit to fall before that happens though imo

 

[Paul_S]

Well I'd rather have the zar decline than gov attempting to artificially prop it up.

It'll stabilise eventually. Still has quite a bit to fall before that happens though imo

What if the government do something stupid or make some decisions that prevent the Rand from stabilizing?
Like Zimbabwe ...

 

[bchip]

I reckon it won't get there.. Before end of 2016, the US interest cycle will stall or be reversed because the tech bubble bursts amongst other smaller bubbles. Not a huge set back for them but yah big enough to send money back to emerging markets

I am thoroughly impressed sir, a contrarion (with reasoning behind them) like myself.

I agree there is a real possibility of money flowing back into Emerging markets,
consider Russia and Brazil are already scrapped as Junk ratings, SA still has an edge...if it can skirt the next review.
If that is the case bond yields with forex gains are very attractive to US hedge fund managers.

 

[whitedox]

It'll stabilise eventually. Still has quite a bit to fall before that happens though imo

How much more falling do you reckon before it stabilizes?

 

[Oopsie]

The ZAR is not falling as much as you think. It is the USD that is gaining due to the interest rate hike.
You can only access the decline of the ZAR if you compare it to a basket of main currencies. The Euro has also declined against the USD.
Emerging markets are being sold off but this will end and money will soon start flowing back here.
The ZAR is far oversold being the most traded exotic currency in the world and the Zumafication of the ZAR is correcting back down as we speak.