Zuma’s Populism Set to Weaken Rand, Top Forecaster Says
- LBBW, most-accurate forecaster, sees rand at 17 per dollar
- Second-ranked MUFG says most bad news priced into currency
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South Africa’s rand is overvalued and has little chance of strengthening in the next year due to the policies of President Jacob Zuma’s “populist” government, according to the currency’s best forecaster for the past four quarters. Instead it may weaken to 17 per dollar.
A recovery in the rand, which has gained 6 percent against the dollar this year after a 25 percent decline in 2015, will be cut short because South Africa’s government is losing the confidence of foreign investors, said Matthias Krieger, an analyst at Landesbank Baden-Wuerttemberg, which was the best dollar-rand forecaster in a Bloomberg survey.