The global environment remains favorable toward emerging markets, which is positive for the rand. Also, given its relatively high interest rate, the rand has been a player in the global carry trade, as well.
“The global risk appetite has improved,” Wardle says. “Liquidity is still very loose across the globe, which encourages managers to search for yield.
” The main risk, Wardle warns, is the external environment. If global stock markets were to come under pressure, money managers could trim exposure to emerging-market positions, which would likely result in a weaker rand.
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