Compare money transfers, currency exchange and international transfer

Sun 29 May 2022 00:38GMT

Compare Money Transfers. Safe. Fast. Free.

A money transfer through a foreign exchange broker is the smart move. With excellent exchange rates and fee-free transfers, you could save time and money.

I need to send money...

Pound to Rand Exchange Rate Surges as ANC Muses Nationalising ZA Central Bank

Published: 5 Jul at 4 PM Tags: Pound Sterling, Currency Exchange, Yen Exchange Rate, Rand Exchange Rate, UK, Inflation,

The Pound has soared by 2% against the South African Rand today, thanks to a sharp drop in ZA economic confidence.

UK data has actually been unsupportive, with the services and composite PMIs for June showing falling economic growth.

The drops recorded were greater than expected and followed earlier declines in the UK’s manufacturing and construction sectors.

Sterling dropped against most regular peers, only advancing on the Rand due to worse South African news.

Looking ahead, the Pound may be able to make gains of its own accord on Friday when UK trade balance stats come out.

The April trade deficit came in at -2.05bn; if this reduces for May’s result then the Pound could rally against the Rand.

The recent Rand to Pound crash has come from a self-inflicted blow delivered by the ruling African National Congress (ANC) party.

This has been the proposal by the ANC that the South African Reserve Bank (SARB) should become state-owned under nationalisation plans.

The ambitious proposal is supposedly aimed at making the SARB work for the ‘socioeconomic wellbeing of the citizens’, rather than having it focus on managing inflation.

Notably, the SARB is one of the few central banks across the world that still has shareholders, like the Bank of Japan (BoJ) and Riksbank in Sweden. These individuals cannot choose who the SARB’s governor is, but can vote on the appointment of seven of ten non-executive directors.

According to Abax Investments Portfolio Manager Rashaad Tayob, traders may be panicking about the central bank’s future, when not much will actually change;

‘The net effect [of nationalisation] is zero but I think investors are on edge given that the mandate of the bank has been questioned and targeted in a very political way. People are conflating ownership of the Reserve Bank with control of it, which isn’t the case at all’.

These are still very early days for nationalisation plans, but for the future value of the Rand, this is just another ticking economic timebomb.

More immediately, the next South African data will be Friday’s foreign exchange reserve figures for June. Forecasts are for a slight reduction in reserves, but the data is considered low-impact, so the Rand could be unaffected by the news.