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SocGen Expect Rand To Firm, See 75bp Of SARB Rate Cuts This Year

ZAR

Societe Generale write that they remain constructive on the rand despite its 3.5% loss against the greenback so far in 2024, with USD/ZAR set to cross below the 18.00 figure by the year-end in their view.

  • The rand may be vulnerable in the short term, due to uncertainty around the general elections and South Africa's "shaky" fiscal position, but it should get some reprieve beyond the short and medium term as domestic noise dissipates.
  • SocGen note that "the latest positive developments in inflation will open the door for the SARB to start a cautious rate-cutting cycle at the May MPC meeting." They expect a 25bp cut in May, followed by two cumulative 50bp cuts in 2H2024.

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