The Johannesburg Stock Exchange bounced on Thursday as the US Federal Reserve downgraded its economic and inflation forecasts for this year, setting a gradual tone to raise interest rates. The rand took much relief from this as it strengthened to R11.94/$ from R12.32/$.
Eskom once again erased the benefit (of the stronger currency) as it was downgraded by ratings agency Standard and Poor’s. The ratings agency gave the power utility a junk credit rating due to the leadership void caused by the suspension of four executives.
Consumer inflation in SA slowed to 3.9% last month, a four year low, strengthening the case against rate hikes as the Reserve Bank meet next week.
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