The rand drifted lower, affected by the spike in global risk appetites amid the turmoil in the global banking sector.
THE RAND drifted lower, affected by the spike in global risk appetites amid the turmoil in the global banking sector.
At 10am on Monday the rand was standing at R18.42 to the dollar, R22.43 to the UK pound and R19.62 to the Euro.
According to Nedbank’s Economic Monitor, a spate of domestic data reflected surprising resilience in the face of unprecedented load shedding.
The report also noted that mining output, manufacturing production, and retail sales also rose significantly in January compared with December.
It should be noted that global equity markets remained under pressure as the contagion fears from the US bank failures intensified.
“Some calm returned to the US markets after the authorities provided enormous support to the banking sector, but European bourses suffered as the troubles spread to Swiss bank Credit Suisse”, according to Nedbank.
US inflation eased in line with expectations. Headline inflation moderated to 6% in February from 6.4%. However, core inflation was stickier, only easing to 5.5% from 5.6%.
The European Central Bank (ECB) hiked its policy rate by an aggressive 50 basis points (bps) to 3.5% to counter persistently high inflation.
China’s industrial production and retail sales figures for January and February show that activity improved after the lifting of Covid restrictions. However, growth rates remained remarkably moderate given last year’s low base.
Reserve Bank may hike rates again
In a Bloomberg report, Sanisha Packirisamy, an economist at Momentum Investments said that SA policymakers nearing the end of the interest-rate hiking cycle may increase the the benchmark by 25 basis points.
Packirisamy says this could be done to mitigate potential risks to SA’s inflation outlook.
– BUSINESS REPORT
