South Africa comes back into the firing line

The South African rand has come under pressure this month as renewed attention on monetary tightening in the US has put the country’s large current account deficit back into the spotlight. The latest financial market moves will make the job of the successor to Gill Marcus as SARB Governor even harder, as interest rates will need to be raised further, in spite of the weakness of the economy. Elsewhere in the region, most currencies have avoided the worst of the EM sell-off. Even so, inflation remains high in a number of countries – including Nigeria, Ghana and Kenya – and further policy tightening looks likely.