Cape Town - At the time of writing, the rand was appreciating. Why? Because the latest opinion polls out of the UK pertaining to the vexed Brexit issue were more favourable to the ‘remain’ side. This referendum is therefore of critical importance not only to the UK and Europe, but also to us here at the southern tip of Africa.
Currency issues seem to loom large in any discussion about the domestic economy. And a Brexit or ‘leave’ can flesh open a fresh wave of rand volatility detrimental to our already ailing economy.
Emerging markets are already under strain. The Brexit threat adds global uncertainty and a potential capital (and currency) flight to safer havens. While sterling may well devalue immediately after any Brexit vote, it is the US dollar that may strengthen, thereby affecting the ZAR.