Gill Marcus and Pravin Gordhan comment

Speaking at a WESGRO investor lunch in Cape Town yesterday, SA Reserve Bank Governor Gill Marcus touched on a number of key themes for the domestic and global economies, a key focus of which was the current debate about the strength of the rand and the wall of money that continues to flood emerging markets.

The SARB is of the opinion that capital flows into emerging markets will continue into next year, and we think this signals that the Bank's inflation forecast will likely be reduced at upcoming meetings.

The governor went on to say that the solution to ZAR strength is "not clear cut" and that the desired outcome of Brazil's tax on inflows was “short-lived”. All this speaks to recent comments by the SARB that, although it remains concerned about the strength of the rand, there is very little it can do (by itself).