The Pound Sterling to South African Rand (GBP/ZAR) exchange rate edged lower by around -0.51% on Wednesday morning.
After the Bank of England (BoE) published minutes from their most recent policy meeting, the Pound slumped versus nearly all of its major peers. This is due to policymakers’ unanimous decision to hold the cash rate, a change from previous meetings which had two dissenters on the subject.
The South African Rand, meanwhile, ticked lower versus many of its currency competitors as a result of inflation softening. However, the losses have been fractional given that inflation still rests comfortably within the South African Reserve Bank’s (SARB) target range.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate is currently trending in the region of 17.4510.
Pound Sterling (GBP) Exchange Rate Softens on United Policymakers
As explained above, the Pound slumped on Wednesday after the BoE published minutes from the most recent policy meeting. In previous meetings, two of the policymakers campaigned for an immediate rate hike, but the most recent minutes revealed that they had retracted this opinion.
‘For the two members who had voted in the previous month for an increase in Bank Rate, the decision this month was finely balanced,’ the minutes said. ‘They noted the risk that low inflation might persist for longer than the temporary factors implied and concluded that this risk would be increased by an increase in Bank Rate at the current juncture.’
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate has fallen to a low today of 17.4260.
South African Rand (ZAR) Exchange Rate Edges Lower on Inflation data
After South African inflation was seen to soften fractionally, the Rand edged lower versus many of its major peers. Year-on-year Inflation Rate dropped from 5.8% to 5.3%, with December’s inflation rate dropping by -0.2%. The Core Inflation Rate also showed a fractional declination from 5.8% to 5.7%.
The lower inflation rate ‘is not only a big boost to consumer finances, but will also help to take pressure off the Reserve Bank,’ stated Johann Els, an economist at Old Mutual Investment Group in Cape Town. ‘It is unlikely that the Reserve Bank will hike rates over the next few months.’
Pound Sterling to South African Rand (GBP/ZAR) Exchange Rate Forecast to Hold Losses
Given the lack of data to curb the trend, the Pound Sterling to South African Rand (GBP/ZAR) exchange rate is likely to continue trending lower on Wednesday.
The Pound Sterling to South African Rand (GBP/ZAR) exchange rate reached a high today of 17.5850.
