Rand continues to make major ground against US dollar
The rand is currently trading at around R15,28 to the US dollar.
JOHANNESBURG - The rand has continued to make major ground against the dollar, hovering near levels seen last year.
The local currency flirted with levels near R18 to the dollar in December after President Jacob Zuma fired finance minister Nhlanhla Nene.
However it's now trading at around R15,28 to the dollar.
Analysts say the news of a decision to possibly suspend a rates hike in the US has had an impact on emerging market currencies.
Talk of a hike in US interest rates sent the rand plummeting last year and this, combined with the change in finance minister here at home, created the perfect storm for the rand to go into a tailspin.
However, the decision by the Reserve Bank to hike the interest rate by 50 basis points - lead to the rand recovering - and the latest news from the US has also helped the local currency.
Zuma announced in his State of the Nation address last week that government was concentrating on economic growth.
With the exchange rate recovering, it'll now be cheaper to import goods into the country - which is good news for inflation.
PRAVIN GORDHAN TO THANK FOR STRONG RAND
The recent interest rate hike and Finance Minister Pravin Gordhan's firmer economic stance have been cited as the main reasons behind the rand strengthening to its best levels so far this year.
Brigid Taylor of KAON Capital says all eyes are now on Gordhan's budget speech next week to see if it can bring even more relief.
"As long as we talk the right language, and that comes down to the budget, then we are still doing a good job and we can recover from this. Hopefully Pravin Gordhan pulls a rabbit out of a hat to keep the ratings agency's at bay."