USD/ZAR: Surprise hike by 75 bps could boost the Rand – Commerzbank

The South African central bank (SARB) will hike its key rate further from 6.25%. A 75 basis points hike could support the Rand, economists at Commerzbank report.

A rate hike of 50 bps is unlikely to affect the Rand 

“The decision is likely to be quite narrow, although we consider it likely that the SARB will switch down a gear. At the same time, the model-based rate outlook is likely to be corrected to the upside to signal further rate hikes.”

“As a rate hike of 50 bps seems to be largely priced in on the market this is unlikely to affect the Rand much, in particular, if the vote, statement and rate outlook seem sufficiently hawkish.”

“A surprise hike in the key interest rate by 75 bps to 7% from a market perspective could give the Rand a boost, at least for a short time.”