The rand firmed below the R17 mark for the first time in over two years.

The local unit last traded at that level against the greenback in January 2023.

The gains are attributed to Finance Minister Enoch Godongwana’s announcement of a three percent new inflation target, a first adjustment in 25 years.

Additionally, rand appreciation is also on the back of a weaker US dollar following its recently published labour data, which could see an interest rate cut by the Federal Reserve in December.

Chief Economist at Investec, Annabel Bishop says, “The rand has pierced the R17 to the US dollar mark and has been tracking towards R17 to the dollar yesterday on a favourably perceived budget. The credit rating agency Standard & Poor is increasingly expected to upgrade South Africa’s credit rating this evening, which should be positive for interest rates and could see further interest rate cuts in South Africa along with the fact that we have also as well seen a lower inflation target. Lower interest rates in South Africa do mean stronger economic growth and in turn, that improves job creation.”

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