Markets analyst Patrick Mathidi says the nervousness on the markets is easing as the swearing-in of Members of Parliament has gone through smoothly and there is better clarity on coalition deals. He says the rand continuing to strengthen against the US dollar on Friday’s market close is also a sign of confidence.
However, he says the swearing-in of the lawmakers and election of the President provides a sense of continuity.The local currency was trading at 18. 35 to the US dollar in late afternoon trade, 0.4% stronger than on Thursday. The unit was trading at 18. 40 to the greenback when the JSE closed. Stocks in local banks and retailers surged more than 4% on the day.“The rand strengthening also is a sign of confidence that indeed…first step towards cutting rates.”
Mathidi says while the Reserve Bank decision will be data-dependent, the odds are high that there will be an interest rate cut before the end of the year.