By: Chime Amara
The South African rand regained ground on Friday after a brief period of uncertainty surrounding the mandate of the South African Reserve Bank (SARB).
The currency had weakened earlier in the week amid concerns about the future of the central bank's independence, as well as anticipation of the release of key US employment data.
However, the rand recovered after SARB Governor Lesetja Kganyago assured markets that the bank's mandate, which includes maintaining price stability and protecting the value of the currency, will not be compromised.
Further, the SARB governor assured investors that “the SARB remains committed to fulfilling its mandate and will continue to act in the best interests of the South African economy,”.
The rand's recovery came as the US jobs data, which was released on Friday, showed a stronger-than-expected increase in employment. This helped to boost investor confidence and contributed to a stronger demand for riskier assets, such as emerging market currencies.
Overall, the rand ended the day up against the US dollar, closing at 14.35 rand to the dollar, a modest but welcome improvement for the South African currency.
Analysts expect the rand to remain volatile in the coming weeks, as markets continue to assess the outlook for the South African economy and the central bank's monetary policy. However, the SARB's commitment to its mandate has helped to restore some stability to the currency.
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