Taking a Look Back at the Third Quarter, 2018
In South Africa, low returns continue to be off-putting for investors, but the case for staying the course remains strong. On a macro level:
- The SARB left the repo rate unchanged at 6.5% at both the July and September meetings. Many analysts believe that the MPC will keep the rates on hold in Q4 2018, in the face of relatively benign inflation pressure and weak growth.
- The Rand, caught in the Emerging Market currency turmoil, had a volatile Q3-18. The USD/ZAR traded in a range from USD/ZAR 13.90 in July to a peak of R15.4 in September. The Rand then pulled back to R14.14 at the end of the quarter.
- Inflation accelerated modestly in Q3-18 compared to Q2-18, averaging 5% from 4.5% the previous quarter.