The Budget delivered in February showed strong commitment to fiscal prudence, and the 75 basis points of interest rate increases by the Monetary Policy Committee in 2016 seemed to assure the market of the Bank’s commitment to maintain price stability. The recent strengthening of the rand is welcomed, following the sharp sell-off late last year.
However, as the rand remains vulnerable to negative external and domestic factors, we will need to continue to monitor economic and financial developments in China as a key driver for commodity prices and emerging market currencies.