A weaker exchange rate for South Africa would probably raise implied rand volatility, adding to overall risk aversion and weak sentiment towards rand-denominated assets.
Although the nominal effective exchange rate of the rand was reasonably stable during 2014, relative to baskets of commodity-exporting or large EMEs, it depreciated by about 10 per cent on a tradeweighted basis during 2015 to date due to the combination of domestic and global developments already discussed.