Bank of America (BofA) Securities says it is “bearish” on the rand for now as the currency is at the mercy of politics and will likely slump in the third quarter.
The standoff between the ANC and the DA over Cabinet positions in the newly formed government of national unity (GNU) has resulted in what BofA calls “rising political risks” associated with SA’s currency. BofA is forecasting the rand will slip to R18.40/$ between July and September, though it is likely to resume strengthening against the dollar in the fourth quarter as US interest rate cuts move closer.
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