South African Rand: SARB tightening and fiscal risks – BNY
The post South African Rand: SARB tightening and fiscal risks – BNY appeared on BitcoinEthereumNews.com. BNY’s Bob Savage argues that South African Reserve Bank (SARB) is likely to lead emerging market tightening as South Africa reverses its easing path and hikes the repo rate back to 7.0%. The report notes improving inflows and mining-related support for South African Rand (ZAR), but stresses that higher U.S. yields and Fed policy set the bar, requiring more forceful Emerging Markets (EM) moves to maintain credibility and stabilize South African government bonds (SAGBs). SARB leads EM rate reversal “A shift in the Fed’s policy stance has reset the benchmark for emerging market central banks. On the back of surprise hikes in Asia to defend currencies and avoid excessive outflows, there are many candidates in EM that can follow, especially if fiscal performance is also under pressure, or other idiosyncratic factors come into play. Turkey is seen as a candidate, especially with growing r