Some analysts say the economic fall-out of another aggressive hike is a major concern for the rand outlook, while others believe the rand took a hit because of the MPC's less hawkish tone. The rand crashed to a new record low overnight, reaching R19.8279/$ on Thursday night. The currency has now lost almost 26% of its value over the past year. In the past two weeks alone, since the US accusation that Russia received arms in South Africa, it has plunged 8%.
Some commentators blame the slump on Reserve Bank Governor Lesetja Kganyago's less hawkish tone about future rate hikes. "Now, we have just reached restrictive territory. We have got to see the effects of this policy stance and what it means." This was interpreted as a signal that the bank is hoping not to raise rates again.
However, others believe that the sharp rand slump was triggered by concerns about the economic fall-out of another aggressive hike. South Africa may already be in recession as load shedding devastates the country.