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Rand gains 1.6% against the dollar as Turkey hikes rates

Sep 13 2018 13:27
Jan Cronje

The rand firmed by 1.6% against the dollar on Thursday after Turkey's central bank hiked interest rates. The rand has been taking its cue from the movements of the Turkish lira in recent days, as SA's fellow emerging markets battle economic difficulties. 

In a press statement on Thursday afternoon the Turkish central bank said its monetary policy committee decided to increase the one week repo rate from 17.75% to 24%.

The rand opened the day's trade at R14.95/$ and firmed to R14.69 to the greenback directly after the bank raised rates by 6.25%. It was trading at R14.74/$ at 13:18. 

The lira, meanwhile, was up 2.8% against the dollar at 13:19. 

Earlier analysts had predicted the local currency would strengthen if Turkey raised rates. 

"The bigger the [Turkish bank's] hike, the better it would be for emerging markets," said TreasuryONE dealer Andre Botha before the decision was made. 

The rand has now made up almost all the losses it suffered last week, when it fell to a low of over R15.60/$. But market watchers have warned that it is still in volatile territory and may weaken again.  

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turkey  |  us  |  china  |  markets  |  currencies  |  lira  |  rand
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