Rand strengthens while markets benefit from weakening pound

Economists say a stronger rand will be good for inflation as the price of importing goods will be less.

The South African rand. Picture: Craig Wynn/EWN.

JOHANNESBURG - The rand has continued to strengthen against the pound due to persistent concerns about the state of the UK economy after the Brexit.

The pound has lost major ground against the dollar following the decision by Britain to exit the European Union.

The local currency is currently at 17 - 43 to the pound.

Investors say they are now preparing for data that will give further clues as to the state of the UK economy.

The Bank of England cut interest rates last week the first time since 2009 and there are concerns that the effects of the Brexit will still be felt for long time.

Economists say other emerging market currencies have also benefited from the weaker pound.

They say a stronger rand will be good for inflation as the price of importing goods will be less with the rand also strengthening against the dollar.

Inflation has moved outside the reserve bank's target of three to six percent and there is general consensus that a stronger rand is therefore welcome news.