Pound Sterling Holds Ground Against South African Rand Amid Interest-Rate Forecast

The Pound Sterling (GBP) continued to hold its ground against the South African Rand (ZAR), trading around 22.0374 on Friday after climbing 1.19% in the previous session.

This leaves Sterling above its September closing level of 21.7846, although still below where it began the year.

Crédit Agricole has forecast South African rates staying at 7.25% through Q4, with oil being the main risk to this prediction.

The bank's argument concerns a potential loss of interest-rate support for the Rand, as markets are pricing in another 66 basis points of tightening over six months.

Crédit Agricole believes that this is too much, and instead sees an important distinction between acknowledging inflation risks and committing to further increases.