Commerzbank note, the rand was, unlike other...>

RAND: Commerzbank note, the rand was, unlike other EM currencies, initially

unable to benefit from the prospect of an imminent easing of monetary policy by

the Fed and the ECB. Markets mainly focused on negative domestic factors which

led to ZAR depreciation. 

- Looking at the rand's domestic issues also makes us believe that there is high

potential for a weaker ZAR in the coming months. The main risks from this side

include the rating review scheduled for Nov, which in view of the weak economy

and eroding public finances could fuel additional uncertainty within the

markets. The complex challenges posed by the highly indebted state-owned

companies and the sluggish progress of reforms are straining the patience and

confidence of investors. Therefore, and against the backdrop of global risks, we

expect the rand to weaken in the coming months. However, given the

implementation of more concrete reform steps, as of 2020 we envisage the ZAR to

benefit more sustainably, supported by a continued positive environment for EM

currencies.