The rand closed at R14.38 on Wednesday.
Here's how the day ended: 
USDZAR 14.3794
EURUSD 1.1357
EURZAR 16.3225
GBPUSD 1.3195
GBPZAR 18.9480
AUDZAR 10.1870
CADZAR 10.7630
CNYZAR 2.1462Z
ARJPY 7.7422
CHFZAR 14.3974
R186 8.75%
US 10 Year 2.59%
JSE -1.06%
FTSE -0.15%
S&P 500 -0.25%
  15:57
US stocks slip before fed announcement
US equities slipped Wednesday as cautious investors awaited the Federal Reserve policy decision and further news on U.S.-China trade talks.
Ten-year Treasury yields slipped.
The S&P 500 Index opened lower as FedEx tumbled after cutting its annual profit forecast. The dollar ticked higher after three days of losses, while two-year Treasury yields remained below the top of the Fed’s policy target range amid expectations of a dovish tone from the central bank. Apart from a hold on rate increases, markets will watch for any word on plans to end the Fed’s current bond-portfolio run-down.
“All eyes will be on the dot plot this afternoon, as most FOMC participants have signaled they are on board with the Fed’s new ‘patient’ guidance and those who have talked about it in terms of rates have indicated they expect no hikes or one hike this year,” Chris Low, chief economist at FTN Financial, wrote in a note to clients.
“The Fed is likely to reveal the end date for balance sheet runoff today, but may not yet be quite ready to reveal the disposition of maturing assets once runoff ends.”In Europe, a series of negative corporate news stories dragged down the Stoxx Europe 600 Index. Germany’s DAX Index led the retreat as BMW warned earnings would fall and chemical maker Bayer headed for the biggest drop in 15 years after losing the first phase of a U.S. trial over claims its weed killer caused cancer. In Asia, Japanese shares finished higher, while most other markets dipped.
The pound fell as UK Prime Minister Theresa May sought to extend the Brexit deadline to June 30, while the opposition called for the public to have the final say over the country’s EU exit. The euro held steady after German producer prices missed estimates. European sovereign bonds were mixed.
Elsewhere, emerging-market currencies and shares were steady. West Texas crude slid before the release of the weekly U.S. oil inventory report. - Bloomberg
  12:08
South Africa CPI came out at 4.1% YoY and 0.8% MoM which was in line with expectations.
TreasuryONE said this will likely support the decision that the SA Reserve Bank will keep rates on hold next week. 
The rand is currently trading at R14.51 to the greenback.
  09:26
Andre Botha, Senior Dealer at TreasuryONE said in a morning note to clients that the rand was in for a rough ride, particularly in terms of the impact of load shedding.
By 09:26, the rand was trading at R14.48 to the greenback.
“As we stated yesterday the rand is facing some tough headwinds which could lead to an interesting time for the rand in the short term," he said.
Botha said the rand lost about 15 cents on the back of Public Enterprises Minister Pravin Gordhan's briefing on Eskom yesterday and the news, revealed by Fin24, that the power utility and government was planning for Stage 5 and Stage 6.
"The rand closed around the R14.50 level after looking to push stronger in morning trade. The move lower was due to some positive sentiment in the market as we expect the US Fed to be dovish in tonight's press statement.
"Further headwinds that started to blow yesterday was the bump that the US-China trade talks suffered from China looking at not sticking to their commitment to buying several Boeing 737 aircraft. This has caused a little uncertainty in the market with the leaders of the two countries only meeting in April.
"Coupled with the uncertainty on whether the UK will get the desired extension from their March 29 deadline of Brexit has thrown more uncertainty into the market melting pot.
"The latest development in the load-shedding conundrum will make Moody's rating review at the end of the month a bigger event than we expected a couple of weeks ago.
"The headwinds faced by the rand will surely see the rand gain less ground than its EM peers should the Fed be dovish tonight, but in the same breath weaken more if the Fed surprises markets. Locally, we have CPI data out this morning but the main event will be the Fed later on this evening.”
Peregrine Treasury Solutions's Bianca Botes also said that the rand remained on the back foot as SA's electricity woes weighed heavily on the local unit.
"Local CPI data is expected to show an uptick in inflation as a weaker ZAR and increasing fuel prices take their toll. All eyes will be on the Fed later today with markets expecting the same dovish and patient tone with an unchanged federal funds rate.
"Any deviation will lead to some volatility in the currency markets. The rand opened at R14.50/$ today and the expected intraday range is R14.44 to R14.58," she said.
  08:06
Asian stocks mixed before fed
Asian stocks traded mixed early Wednesday as investors held back from making big changes prior to the Federal Reserve’s policy decision.
Treasuries and the dollar steadied.
Shares in Japan, South Korea and Australia edged lower. A rally in US stocks earlier sputtered out after a report that US and Chinese negotiators remain at odds on aspects of their current trade talks soured sentiment.
A rally in oil stalled. Money managers will be looking for clues on future policy from the Fed Wednesday after its dovish shift in recent months helped reboot global equities on bets that interest-rate hikes will be put on hold to support the economy.
News that the Trump administration is concerned that China is pushing back against US demands threatens to curb hopes of a deal.
Elsewhere, a senior European Union official said the bloc is likely to tell Theresa May that she must decide by mid-April whether to extend Brexit until 2020 or risk leaving in three months without a deal.
The euro edged higher as data showed German investor confidence rose for a fifth straight month.
  08:05
Palladium tops $1 600
Palladium topped $1 600 an ounce for the first time, and there’s little sign of the rally slowing as global supply tightens.
The price of the metal - mainly used in autocatalysts in gasoline vehicles - has almost doubled from a recent low in August. Demand has remained robust as manufacturers scramble to get hold of palladium to meet more stringent emissions controls, particularly in China, even as auto sales in key markets slow.
 
 
 
Credit: TreasureOne
The only successful applicant for the Black Industrialist Programme in Limpopo is taking the department of trade and industry to court because he didn’t receive his promised R14.2 million grant.
 
Murendi Properties was listed in the department’s annual incentive report up to March last year as the only beneficiary of the scheme in Limpopo.
 
Murendi’s project was an expansion of a building supply retail company and manufacturing plant for roof tiles, for which the Industrial Development Corporation (IDC) had also approved a R30 million loan.
 
IDC loans, together with grants from the department, have been the bedrock of the much-publicised Black Industrialist Programme.
 
The owner of Murendi, Mphendziseni Makhesha, said in an affidavit that the department’s behaviour, which he termed “dilatory” – meaning that it was an act intended to cause delay – had threatened the whole project and could result in 34 retrenchments out of total staff of 90.
 
He applied to the department for the grant in 2016 and it was initially approved in October 2017.
 
Makhesha claims that the department has stopped talking to the company altogether after initial hiccups with its BEE certificate, an issue Makhesha says was rectified.
 
According to his affidavit, he had procured certificates from two different unregistered verification agencies – effectively getting defrauded – before getting a certificate from a proper agency.
 
The court application is targeted at Trade and Industry Minister Rob Davies and the director-general of the department, Lionel October. The relief demanded is that the department be forced to pay the R14 million grant it had approved.
 
The IDC has already paid out “almost all the amounts it approved”, the state-owned funder told City Press.
 
“This is to enable the company to commission its new plant, albeit at a reduced scale in the absence of the department of trade and industry’s grant. This was done to enable the company to start servicing its obligations to the IDC once the repayment obligations kick in.”
 
Makhesha has also already put down R7 million of his own money to settle an earlier debt owed to the National Empowerment Fund.
 
The department’s deputy director-general: incentive development and administration, Malebo Mabitje-Thompson, told City Press the industrialist scheme worked better than most incentives the department had deployed.
 
Mabitje-Thompson, however, implied that there was something wrong with the Murendi grant and the department was opposing the case.
 
“As part of our commitment to zero tolerance to corruption, we will defend any action against the department in court where we believe that governance processes have been breached,” said Mabitje-Thompson.
 
The department has already filed notice that it would oppose the application, implying that it believed there was a breach of governance of some sort.
 
The department did not elaborate beyond generic terms.
 
“Once an application is approved and the investment is under way, inspectors are dispatched to verify the investment and performance information submitted for any claim. In the event that misleading information is submitted, the project is cancelled,” Mabitje-Thompson said by email.
 
There had been no suggestion that the department intended to cancel the project, said Makhesha. However, it did have Murendi investigated to establish the veracity of its BEE credentials.
 
The agency tasked with the investigation, the SA National Accreditation System, however, applied the newer codes of good practice for the construction industry.
 
Makhesha said that this was absurd because his company was not a construction company and, even if it was, the construction codes did not even exist when he applied for the funding.
 
“There can be absolutely no lawful basis on which the department can avoid its obligation to honour the grant,” said Makhesha.
 
Mabitje-Thompson said that the programme as a whole had shown a “remarkable conversion rate from investment decision to start of production”.
 
“To date, 130 projects have been approved; R1 billion has been disbursed.”
 
The IDC said that it had funded “close to 300 deals involving 291 black industrialists” since the programme was launched in 2014.
The Eastern Cape is anxious about possibly losing its R80 billion oil refinery project to Richards Bay in KwaZulu-Natal.
 
For more than a decade, the initiative, known as Project Mthombo, was planned for location at Port Elizabeth’s Coega special economic zone. But this, as well as a possible investment by Saudi Arabia in the project, could soon be lost because of the Durban/Gauteng oil pipeline that is already in existence.
 
Oscar Mabuyane, the Eastern Cape MEC for finance, economic development, environmental affairs and tourism, said there was uncertainty about the project because a decision had yet to be made.
 
“It is clear that there are two sites being explored: the Coega site that government has worked on for some time now, as well as the Richards Bay site, which has been added to the equation,” he said. “Our argument is that government has already incurred costs in developing the Coega site, so this could result in fruitless expenditure.”
 
Mabuyane believes that, more than an economic project, the initiative also carries political clout in that it will take bold political decision making to keep Project Mthombo in the Eastern Cape. And, he believes, doing so will also address a potential fuel security risk.
 
Project Mthombo was mooted by PetroSA as its answer to South Africa’s persistent fuel supply problems, given the refinery’s projected output of 300 000 barrels a day of crude oil. As things stand, South Africa’s fuel demands make the country vulnerable to imports, and it is hoped that this project goes some way towards mitigating that.
 
“People use the argument of Richards Bay’s connection to Durban and Johannesburg via an already existing Transnet pipe that pumps oil from that side,” said Mabuyane. “But from a security point of view, it is a risky situation. If something happens there, what then? How do you connect to Johannesburg? We have an opportunity as government to look at the situation broadly and open our minds.”
 
He said the private sector could easily fund a pipe connection between Port Elizabeth and Johannesburg.
 
Mabuyane said the project, as currently mooted, was solid and was the result of a 15-year investment by government.
 
“Project Mthombo is massive. It is unprecedented.
 
It is one project that connects about five regions in the province, including municipalities such as Sarah Baartman, Buffalo City, Amathole, Chris Hani and Nelson Mandela Bay.
 
“When you talk about the project you also talk of the biofuel project in Cradock, and the opportunity from that.
 
“We believe that it is a project that will be really catalytic, in the literal sense of the word. Driving it from here means that its impact and expansion – and how it connects with almost every participating region in the province – will be felt by many, and its potential of attracting more than 27 000 jobs cannot be ignored.”
 
Mabuyane expressed the view that government should work with the province and stop sending mixed signals about the project as it was “high time” that there was this kind of investment in the Eastern Cape.
 
Mabuyane said that, for too long, the province had been isolated, and government needed to change this.
 
“We believe that a lot needs to be done to lift our province to the level of other provinces, so that it can also participate in the country’s GDP.
The South African government is forecast to be hit by a tax revenue shortfall of almost R43 billion for the tax year ending next month, Finance Minister Tito Mboweni indicated in his budget speech on Wednesday.
 
There were pronounced risks to the local economic outlook with the main risk of concern being power utility Eskom and its financial woes, the 2019 budget review report indicated.
 
The report indicated that government tax revenue for the 2019 fiscal year would come in at R43 billion under the target set at the 2018 budget speech.
 
“There are pronounced risks to the economic outlook. The main risk of concern is Eskom. Failure to fully implement the reconfiguration of Eskom could lead to a negative market reaction that would prompt capital outlflows, with greater pressure on the rand. It would also perpetuate weak investor confidence and reduce economic growth,” the report said.
 
In the worst case scenario, National Treasury is forecasting negative 1% growth this year while its best-case scenario is just over 2% growth.
 
Mboweni cut the National Treasury’s forecast for economic growth for this year from 1.7% to 1.5% due to “fragile recovery in employment and investment, and a less supportive global trade environment”.
 
By 2021, the National Treasury’s best-case scenario is growth of 3% and its worst-case scenario is 1%.
 
“The economic and revenue outlook has deteriorated since the October 2018 medium-term budgetary policy statement and funding pressures from state-owned companies have increased,” the medium-term budgetary policy statement said.
 
“Several other state-owned companies are also in financial distress and have requested government support. As a result, the contingency reserve has been revised up by R6 billion in 2019/20 and any funding provided will be offset by the sale of non-core assets. Additional reforms to strengthen the governance, finances and operations of state-owned companies will be announced in the months ahead,” the 2019 budget review report said.
 
State companies that are looking for bailouts include the South African Broadcasting Corporation (SABC) and Denel.
 
“Several state-owned companies face negative cash flows and are financing operations from debt, which has become increasingly difficult to raise. This moves them perilously close to default unless they receive some form of recapitalisation.”
 
In another worrying sign, debt owed to municipalities is increasing. At the end of March, debt owed to municipalities is forecast to climb to almost R159 billion from almost R99 billion at the end of March 2015.
 
Of debts owed by municipalities that are more than 90 days in arrears, Eskom is the major creditor – it is owed R12.8 billion – followed by water boards with R6.4 billion.
 
“From July 2018 to June 2019 municipal financial year, 113 municipal councils adopted unfunded budgets, up from 83 the prior year.”
 
The government is expecting to issue $2 billion (about R28 billion) in debt by the end of the 2019 fiscal year.
 
Over the next three years, the government will raise an additional $8 billion (about R114 billion) in global capital markets.
 
“This year’s budget underlines the National Treasury’s continued commitment to these requirements in a difficult environment in which economic growth remains weak, public debt and debt-service costs have accelerated and governance and operational concerns are manifest across the public sector,” the review report said.
 
“Weak economic performance and residual problems in tax administration have resulted in large revenue shortfalls,” the report said.
 
“The deteriorating financial position of state-owned companies has put additional pressure on the public finances,” the report added.
 
“The government’s efforts to reform state-owned companies and the launch of the infrastructure fund are expected to increase growth and investment in the year ahead,” the 2019 budget review report said.
 
For the 2020 fiscal year, consolidated government expenditure is forecast to R1.83 trillion.

The South African government is forecast to be hit by a tax revenue shortfall of almost R43 billion for the tax year ending next month, Finance Minister Tito Mboweni indicated in his budget speech on Wednesday.

There were pronounced risks to the local economic outlook with the main risk of concern being power utility Eskom and its financial woes, the 2019 budget review report indicated.

The report indicated that government tax revenue for the 2019 fiscal year would come in at R43 billion under the target set at the 2018 budget speech.

“There are pronounced risks to the economic outlook. The main risk of concern is Eskom. Failure to fully implement the reconfiguration of Eskom could lead to a negative market reaction that would prompt capital outlflows, with greater pressure on the rand. It would also perpetuate weak investor confidence and reduce economic growth,” the report said.

 
 

In the worst case scenario, National Treasury is forecasting negative 1% growth this year while its best-case scenario is just over 2% growth.

Mboweni cut the National Treasury’s forecast for economic growth for this year from 1.7% to 1.5% due to “fragile recovery in employment and investment, and a less supportive global trade environment”.

By 2021, the National Treasury’s best-case scenario is growth of 3% and its worst-case scenario is 1%.

“The economic and revenue outlook has deteriorated since the October 2018 medium-term budgetary policy statement and funding pressures from state-owned companies have increased,” the medium-term budgetary policy statement said.

“Several other state-owned companies are also in financial distress and have requested government support. As a result, the contingency reserve has been revised up by R6 billion in 2019/20 and any funding provided will be offset by the sale of non-core assets. Additional reforms to strengthen the governance, finances and operations of state-owned companies will be announced in the months ahead,” the 2019 budget review report said.

State companies that are looking for bailouts include the South African Broadcasting Corporation (SABC) and Denel.

“Several state-owned companies face negative cash flows and are financing operations from debt, which has become increasingly difficult to raise. This moves them perilously close to default unless they receive some form of recapitalisation.”

In another worrying sign, debt owed to municipalities is increasing. At the end of March, debt owed to municipalities is forecast to climb to almost R159 billion from almost R99 billion at the end of March 2015.

Of debts owed by municipalities that are more than 90 days in arrears, Eskom is the major creditor – it is owed R12.8 billion – followed by water boards with R6.4 billion.

“From July 2018 to June 2019 municipal financial year, 113 municipal councils adopted unfunded budgets, up from 83 the prior year.”

The government is expecting to issue $2 billion (about R28 billion) in debt by the end of the 2019 fiscal year.

Over the next three years, the government will raise an additional $8 billion (about R114 billion) in global capital markets.

“This year’s budget underlines the National Treasury’s continued commitment to these requirements in a difficult environment in which economic growth remains weak, public debt and debt-service costs have accelerated and governance and operational concerns are manifest across the public sector,” the review report said.

“Weak economic performance and residual problems in tax administration have resulted in large revenue shortfalls,” the report said.

“The deteriorating financial position of state-owned companies has put additional pressure on the public finances,” the report added.

“The government’s efforts to reform state-owned companies and the launch of the infrastructure fund are expected to increase growth and investment in the year ahead,” the 2019 budget review report said.

For the 2020 fiscal year, consolidated government expenditure is forecast to R1.83 trillion.

A multimillion-rand tender with the City of Johannesburg (COJ) – that had the potential to be one of the good stories of government’s vision to empower black women – has gone sour and the city is being sued R8 million for not honouring the contract.
 
Faithfulness Business Enterprise was awarded a contract to supply and deliver protective footwear for members of the metro police department – JMPD – valued at R23.760 million over three years in 2014.
 
In accordance with the tender, the company subsequently spent millions of rands and hired more staff to deliver on its contractual obligations.
 
However, the city placed only a single order for R660 000 in December 2014 and then placed orders with other suppliers, leaving the company with a mountain of costs and no orders.
 
Two years into the contract and a single order later, the city applied to the Johannesburg High Court, seeking to terminate the service level agreement on the basis that the tender process was flawed and that there were a number of irregularities.
 
However, none of the alleged irregularities was related to the company or because of its influence.
 
The court dismissed with costs of the city’s application in February last year and upheld the service level agreement as binding and valid.
 
But the city still did not place any orders with the company.
 
The company took the city to court to recoup its losses, which it initially estimated at R17 million, but after being audited amounted to R8.666 million.
 
In a letter of demand sent to the city, the company said it had suffered damages amounting to more than R17 million in respect of rental expenditure incurred in leasing premises suitable for the storage and sorting of the contracted quantities of footwear; salaries and wages of staff who were employed to ensure the capacity to meet the future orders; stationery and printing costs; vehicle costs, office equipment; and loss of profits.
 
Speaking to City Press, Selina Siganga, ownerof Faithfulness Business Enterprise, said the tender had left her worse off and had paralysed her business.
 
“Because of that contract, the banks increased the overdrafts and now I have to deal with them. I have had to lay off people I had employed and had to negotiate with them not to take me to the Commission for Conciliation, Mediation and Arbitration because I was paying their salaries but not getting orders.
 
“This government always says it wants to support black woman in business and wants employment [to create jobs] but it is killing us,” she said.
 
Spokesperson for the city Nthatisi Modingoane opted not to comment on the matter.
 
“The matter is before the courts and thus the city will wait for the court process,” Modingoane said.
 
 
Source: City Express
South African President Cyril Ramaphosa did not make many new announcements his state of the nation address on Thursday night, but he used the occasion to warn those who have dabbled in corruption that government agencies will be coming for them.
 
Using the momentum of the newly appointed head of the National Prosecutions Authority, Shamila Batohi, he announced the creation of a specialised unit to deal with serious corruption and associated offences.
 
Ramaphosa said he had agreed with Batohi for the urgent need to set up this office and would soon promulgate a proclamation that will outline the specific terms of reference.
 
This will send a shiver down the spine of many of his fellow ANC leaders against whom allegations have been made at the Zondo commission of inquiry into state capture.
 
The unit or directorate will focus on the evidence that has emerged from the Zondo commission, as well as other commissions and disciplinary enquiries.
 
It will identify priority cases to investigate and prosecute and will recover assets identified to be proceeds of corruption.
 
This unit, which is already being compared to the defunct Scorpions, will help respond to public complaints that too many public representatives and government officials who are implicated in wrongdoing are let off the hook.
 
It also means that many of Ramaphosa’s opponents who have defiantly held on to positions will be handled by these processes without forcing his hand to fire them.
 
A he spoke, opposition MPs taunted him about a R500 000 donation that his ANC campaign received from Bosasa last year, implying that he could also be found wanting by these probes.
 
Ramaphosa proceeded with the speech nevertheless, without acknowledging or responding to their heckling.
 
Ramaphosa spent a lot of time speaking about the work he had done in the last year since taking over from Jacob Zuma, who was forced to resign by the ANC.
 
In particular he repeatedly mentioned his investment drive, which has attracted millions of dollars in pledges but is yet to make a direct impact on the economy.
 
“We are on the cusp of seeing direct jobs from the initiatives,” he promised.
 
As expected, a plan is also being crafted for the embattled power utility Eskom.
 
“Eskom is in crisis and the risk it poses for South Africa are great,” Ramaphosa acknowledged.
 
He said bold and decisive action was necessary and some of the consequences would be painful.
 
Without mentioning the details, it was clear the plan would either involve major restructuring or possible job losses.
 
“Eskom has come up with a the nine-point plan which we support and plan to implement. Eskom will need to take urgent steps to reduce its costs.”
 
The president was afforded space by the Economic Freedom Fighters, which had threatened to interrupt his state of the nation address unless he gave a proper explanation for the Bosasa donation.
 
But he spoke uninterrupted, which was a fresh breath of air for a Parliament used to the interruptions when Zuma was speaking.
 
Ramaphosa also spoke about a restructured intelligence service.
 
He was going to re-establish the national security council in order to better coordinate intelligence and security-related functions.
 
This follows work done by a high-level review panel on state security agency.
 
       
Source: City Express
The rand fell to a three-month low on Thursday but is slowly recovering against the dollar. Picture: iStock
The rand tumbled to its weakest in three months on Thursday, as emerging market currencies were hit by a wave of risk aversion as fears about global growth intensified.
 
At 9am the rand was 0.6 percent weaker at R14.55 to the dollar, recovering slightly after sliding to R14.89 in the overnight session, its weakest since October 9.
 
The rand was on the backfoot following weak factory data from China on Wednesday and saw losses deepen in tandem with a majority of global currencies after Apple said sales in China and other emerging markets fell last quarter.
 
Apple’s share price fell after chief executive Tim Cook warned shareholders that iPhone sales were slowing faster than expected. Cook said that the company did not foresee the magnitude of the “economic deceleration”, especially in China.
 
The news helped trigger a “flash crash” in currency markets, stoking nervousness about global growth already dampened by the ongoing trade wrangle between the United States and China.
 
Despite this early trade low, the rand gained momentum to trade 0.3% weaker against the dollar by midday. It sat at R14.50 to the dollar at the time.
 
The JSE All Share index, which suffered along with European and Asian stocks on Wednesday amid concerns around a possible slowdown in China, was up 0.8% by midday, with all major indices in positive territory.
 
The rand opened on Thursday at R14.46 to the dollar.
 
 
Source: City Express
South Africa’s Competition Commission said on Thursday it had charged retailer Shoprite and its subsidiary Computicket with anti-competitive behaviour, and recommended a fine.
 
The commission said Shoprite and the event ticket seller had signed exclusive agreements that gave Computicket the ability to discriminate between large and small customers on prices.
 
The commission said the discrimination had forced third parties to engage with Computicket, excluding its competitors.
 
“The Commission has asked the Tribunal to impose an administrative penalty of 10 per cent of Computicket and Shoprite Checkers annual turnover,” the commission said in a statement in Johannesburg.
 
Shoprite was not immediately available to comment.
 
As a result, shares in the country’s biggest supermarket chain fell more than 4 per cent after the announcement, but had recovered to 183 rand, a decline of 1.84 per cent in early trading.
 
The case marks the second time the commission has referred Computicket to the Competition Tribunal, with a decision on similar charges.
 
This is the first time that Shoprite has been added as a respondent to the charges.
 
 
Source: PmNews
In truth, the currency started from a very low base: the Nenegate crisis in 2015.
Its performance this year has not been stellar, but most experts expect it to remain below R15/$ in 2019.
Over the past three years, the rand has been the world's strongest major currency against the dollar.
 
The rand has strengthened by almost 6.3% against the dollar since mid-December 2015, according to data compiled by the independent analyst Johann Biermann. By comparison, the Mexican peso weakened by more than 16% and the Turkish lira lost an almighty 79% of its value. The UK pound fell almost 20% over the past three years as Brexit fears wreaked havoc.
 
Only the Russian rouble, which gained by 6% over this time,  the euro (+3%) and the yen (+6.2%) could keep up with the rand.
 
It is of course worth noting that three years ago the rand was in a very bad state amid the Nenegate crisis.
 
On December 9th 2015, former president Jacob Zuma fired then finance minister Nhlanhla Nene, replacing him with back-bencher Des van Rooyen. 
 
"After all is said and done, the rand has been one of the strongest currencies over the last three years - obviously benefiting from the low base created by Nenegate," Biermann said this week. "Still, not many would've predicted that the rand would outperform these majors in years to come."
 
Unfortunately, 2018 has been tough on the local currency: the rand has lost a painful 14.5% of its value against the dollar - on par with the rouble (-15%) and the Brazilian real (-17%). Even traditionally stable currencies - including the Australian dollar (-8%) and the euro (-6%) - took a hit.
 
The rand/dollar rate over the past five years. (So
The dollar/rand rate over the past five years. (Source: XE)
But most currency experts are not expecting the rand to take a massive hit in 2019.
 
The currency is expected to end 2019 between R12 to R15 a dollar, according to almost 70% of the 160 South African-based bankers, CEOs, CFOs, corporate treasurers as well as foreign exchange and hedge fund executives polled at the Bloomberg Foreign Exchange Summit last week. 
 
The rand will probably trade near R13.40 to the dollar by the end of next year, Standard Bank economist Elna Moolman said, according to a press report.
 
"The expectation is partly based on a dollar story, but also on the assumption that we will see political and policy improvements to support a stronger currency."  
 
Moolman said the next big local events that could influence the rand are the Budget in February, the response from Moody’s (the only agency that has not yet rated South Africa as "junk") and then the natonal elections, expected in May 2019.
 
If the US economy weakens and/or the equity markets fall apart, which means that the Fed won’t hike interest rates by as much as expected, the rand may benefit, according to Biermann.
 
“Also, sentiment towards emerging markets has been very negative in 2018. If it starts to turn, the rand will get a boost."
 
But there are risks – chief among them, Eskom’s R100 billion debt burden.
 
“If government took over the debt, our credit rating will be further downgraded – which will be negative for the rand.”
 
Ratings agencies have also been clear that further slippage in terms of property rights could prompt downgrades, Biermann said. 
 
 
Source: Bloomberg news 
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