The rand’s gains after misrepresentation charges against Pravin Gordhan were dropped will be brief, a survey appears, as worries about conceivable FICO score downsize and an ANC authority decision weigh.
The rand is expected to weaken around 8% to 14.65 per dollar in 12 months, according to a poll taken before prosecutors dropped fraud charges against the finance minister on Monday.
The currency broke on the strong side of 13.50 after the news, climbing to its highest level in over a month, and such healthy gains may give the poll a bearish edge.
But concerns still cloud South Africa’s outlook.
“I won’t say I would have changed [my forecast] after yesterday. It was not really based around the short-term developments, but more of an 18-month view,” said KADD Capital economist Elize Kruger, who submitted her forecasts last week.
“I think we are going to have a lot of volatility and political noise if the credit downgrade does not happen in December, I think we might not be out of the woods,” she added.
“The negative political dynamic is likely to remain until the ANC leadership contest next year and would likely weigh on the rand,” said Rafiq Raji, chief economist at Macroafricaintel.