@lesedi_d4v3: ✅️The Diagnosis (Why is the Rand so weak? 📉) First, Governor Kganyago has been blunt: the rand is "incredibly undervalued." 😥 It’s not just a feeling. The data is staggering. World Bank measures from last year suggested a "fair value" for the rand was around R7.40/$. The actual rate, as we know, was R18.30/$! 🤯 But why? This is the key: for the last decade, a weaker rand hasn't helped our economy grow (which it's supposed to). Instead, the rand and the economy have gotten weaker together. The Governor used a great analogy: the rand is like a company's "share price." 🏢 It reflects investor confidence in "South Africa Inc." 👎 "Bad News" (state capture, unsustainable debt, junk status) crushes confidence, so investors sell. 👍 "Good News" (structural reforms, fiscal discipline) builds confidence, so investors buy. Simply put, we have a deep confidence problem. ✅️ The Plan (How do we fix it? 🎯) So, how does SARB plan to fix this confidence issue? This is the big move: they're shifting their entire inflation strategy. THE OLD GOAL: You'll remember the target was a range of 3%-6%, with the MPC aiming for the 4.5% midpoint 📍. THE NEW GOAL: The Governor announced they are deviating from that 4.5%. The MPC's new operational aim is now 3% ⬇️. The logic? SARB says our inflation is "out of line with our peers" 🌍. By forcing inflation permanently lower, they're trying to create price stability. The theory is that stable prices are the foundation for building real, long-term investor confidence. My Takeaway: The Finance Minister still has the final say on the official target band, but he and the SARB are working together 🤝 and both agree the old 3%-6% range is too wide. SARB is playing the long game. They are using a tougher, more aggressive inflation target as their main tool to build stability and prove to the world that SA is a reliable place to invest. They believe this is the only sustainable way to fix the rand's weakness. What are your thoughts on this new strategy? Let me know in the comments! #SARB #SouthAfrica #Rand #Economy #Inflation

Lesedi💡

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Friday 24 October 2025 01:49:32 GMT