GBP/ZAR: Pound to rand outlook ahead of the SARB decision

on Mar 29, 2023
  • The GBP/ZAR price has been in an uptrend in the past few weeks.
  • The Bank of England (BoE) hiked interest rates last week.
  • Focus shifted to the upcoming SARB decision.

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The GBP/ZAR exchange rate was hovering near its highest level since 2020 ahead of the upcoming interest rate decision by the South Africa Reserve Bank (SARB). The pound to South African rand rate was trading at 22.36, meaning it has jumped by about 20% from its lowest point this year.

SARB interest rate decision

The GBP/ZAR pair has had several catalysts in the past few days. Last week, as we wrote here, the Bank of England decided to hike interest rates by 25 basis points to 4.25%. This rate increase came two days after data by the Office of National Statistics (ONS) showed that the headline consumer price index (CPI) jumped to 10.4% in February.

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In its decision, the BoE noted that inflation will likely drop sharply later this year. This view was supported by analysts at Dun & Bradstreet who wrote that:

“There are however good reasons to think that inflation will drop sharply in late 2023 to reach a new and happier medium. Booming energy prices and supply chain bottlenecks that contributed to the surge in inflation in 2022 are now gradually subsiding.”

On Tuesday, Bank of England’s head said that the bank will likely continue fighting inflation in the coming months. He is less concerned about the banking crisis, which has led to the collapse of banks like Credit Suisse and Silicon Valley Bank.

The next key catalyst for the GBP to ZAR price will be the upcoming interest rate decision by South Africa’s SARB. Economists believe that the central bank will continue hiking interest rates as inflation remains at an elevated level. 

Precisely, analysts believe that the bank will hike by 25 basis points to 7.50%. If this happens, it will be the ninth rate hike. Like other banks, SARB will likely hint that it will end its rate hikes in the coming months. Data published last week showed that core inflation rose to 5.2% from the previous 4.9%.

GBP/ZAR technical analysis


GBPZAR chart by TradingView

The daily chart shows that the pound to rand exchange rate has been in a bullish trend in the past few months. The pair managed to move above the key support level at 21.97, the highest level on December 1. This bullish trend is being supported by the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is between the 70 and 50 levels. 

Therefore, the pair will likely continue rising as buyers target the key resistance at 23. A move below the key support at 22.15 will invalidate the bullish view.


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