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The Reuters survey showed that South African Rand was better than other emerging currencies in the next 12 months in the emerging market dollar storm, despite the sluggish performance of the South African economy in 2018.
According to the median estimate of about 30 analysts on 4-6 June, Rand rebounded to 12.5 after 12 months against the dollar, more than 2% more than the Rand's current exchange rate of 12.76 against the dollar.
"The real interest rate in South Africa is still attractive, and once the 'risk aversion' is subsiding, it may lure capital back," said Elize Kruger, an analyst at NKC African Economics.
Last month, the Central Bank of South Africa maintained its target repurchase rate unchanged at 6.5%, trying to assess the situation between consumer price inflation and fragile economic recovery.
According to another survey last month, analysts expect that interest rates will not be adjusted until at the end of next year, at least.
Kruger believes that Rand's reasonable exchange rate against the US dollar is about 12.35, which represents Rand's rising potential.
As data showed that the first quarter of South Africa's economic contraction was the largest in nine years, Rand hit the two week low against the dollar on Tuesday. Most of the investigations were done before.
Analysts expect that the US dollar rally is coming to an end. It will weaken gradually before the end of the year. It is mainly affected by factors such as the US double deficit problem, which should support Rand.


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