On Thursday, the rand broke below R18 to the dollar, strengthening to a seven-week high following the South African Reserve Bank's decision to increase the benchmark repo rate by 50 basis points to 7.75%, the highest since 2009. The decision was unexpected, with the market anticipating a 25 basis points increase, and two members of the Monetary Policy Committee voted against it. The hike is aimed at curbing persistent inflation and capital outflows in 2023.
Despite the uncertainty surrounding future rate hikes, the rand gained over 1.7% in intraday trade, reaching R17.7488/$.
Figure 1: USDZAR price historical chart (Source: ThinkTrader Web)
Globally, investor sentiment continued to improve with confidence returning to stock markets as the banking sector turmoil eased.
In local markets, the JSE all share rose 0.29%, with industrial metals, resources, precious metals, and food producers all gaining.
Brent Crude oil traded at $78.34 a barrel, WTI Crude oil at $74.33 a barrel, and gold, platinum, and palladium spot prices trading at $1981.44, $987.90, and $1478.73, respectively.
Across the globe, the S&P 500, Dow Jones, and Nasdaq all closed higher, while the FTSE 100, CAC 40, and Germany's DAX all gained. In Asian markets, the Nikkei 225 and Hang Seng were up by 0.36% and 0.63%, respectively.
