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South African rand may weaken after rate hold, Commerzbank says

Commerzbank expects the rand to struggle for an extended period after South Africa’s July decision to keep its key rate unchanged surprised markets.

Reported · Written up by our desk · EM Currencies

Commerzbank, via strategist Volkmar Baur, said South Africa’s July central bank decision to leave its key rate unchanged was a surprise, even though the South African rand has held up reasonably well amid pressure from the Iran conflict.

Baur pointed to slowing reform momentum and a weakened policy anchor, arguing that those factors could weigh on the rand for longer rather than providing a near-term boost.

FXStreet also noted that, despite the rand’s relatively resilient performance, the expectation of continued strain aligns with Commerzbank’s view of the rate hold’s currency impact.

The piece did not provide a specific rand forecast level, but it tied the outlook directly to the stance taken by the central bank in July.

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