In South Africa low-income households experienced financial strain towards the end of last year as a result of food inflation and rises in the price of petrol in 2016 and 2017, as well as high unemployment rates, says the latest FNB and Bureau of Economic Research (BER) Consumer Confidence Index.
The rand is currently trading at a high of R11.80 to the dollar up from R16.80 in 2017.
The survey shows that consumer confidence slipped to an all-time low in the last quarter of 2017 compared with the high in the third quarter.
But the election of Cyril Ramaphosa as the ANC’s president could see consumer confidence improve in 2018, said Investec chief economist Annabel Bishop.
“The rand has recently strengthened on Ramaphosa’s appointment to president of the ANC, positive comments on ending corruption, repairing SOE [state-owned enterprise] governance and the health of public finances, maintaining key institutional strengths and promoting economic growth, as well as USD weakness,” says Bishop.
(Source: Getty Images)
Bishop added that the rand could move to R11 to the dollar should President Jacob Zuma resign to make way for Ramaphosa to lead the country “without any conditions that hamper his ability to follow the free market reforms necessary to avoid further credit rating downgrades, eradicate corruption and deliver rapid economic growth”.
President Jacob Zuma is expected to resign within two weeks or be pushed out by his own party, whom do not want him to deliver the SONA[State of the Nation Address] scheduled for February 8.
The continued strengthening of the Rand is a solid investment toward the R11 mark against the Dollar.
Update: A vote of no confidence is being discussed to be tabled before February 8. If this is successful it will be another nation within BRICS to have expelled their president.
A Link to my last post : https://steemit.com/drought/@donovanbanyard/what-will-happen-if-the-first-major-city-in-the-world-runs-out-of-water