South Africa has a rare possibility to use financial investment inflows and improved regards to trade as a basis for reform which can produce a stronger rand in the long term, Credit Suisse director Alexey Pogorelov tells The Africa Report.
Rand outperformance versus other emerging market currencies earlier this year was driven by the boost in global commodity prices, which helped to offset higher energy prices, Pogorelov states in London. South Africa exports products consisting of platinum, iron ore and coal.
Along with a considerable current account surplus, the economy has likewise gained from strong portfolio inflows into the equity market, partially due to moving from other monetary markets such as Russia which are no longer readily available, he says. The result is that the rand " has ended up being more durable to the tightening up in the global financial conditions thanks to a more powerful external position."