Rand Prints New All-Time Lows After SARB Monetary Policy Decision

Spot USD/ZAR surged to new record highs after the SARB raised their policy rate by 50bp while warning that the rand may continue to weaken. The decision was taken unanimously in a rare show of consensus among MPC members. Furthermore, the central bank revised the inflation outlook across the forecast horizon, while keeping the growth outlook little changed. Governor Kganyago refused to guide on the possible timing of the end of the tightening cycle, suggesting that it could only happen once inflation is under control.

• Spot USD/ZAR topped out at ZAR19.6776 but keeps refreshing all-time highs and trades at ZAR19.6545 as we type. The next technical resistance level is located at the psychological ZAR20.00 level. SAGBs have taken a hit, with yields jumping across the maturity curve.
• The full SARB statement can be found here.