Uncertainty remained high and the currency could remain volatile as global events continue to influence markets.
The rand has clawed back some of the losses it suffered after the South African Reserve Bank's (SARB’s) surprise decision to leave interest rates unchanged last week, but economists say consumers are not out of the woods yet.
According to economists, developments in the Middle East, oil prices and the outcome of the latest Fed meeting are likely to determine whether the rand continues to recover or comes under renewed pressure.
The local currency tumbled after the Monetary Policy Committee (MPC) kept the prime lending rate unchanged at 10.5%, despite widespread expectations of a 25 basis-point increase. Annabel Bishop, Investec chief economist, said the currency had weakened to R16.98 against the dollar after the MPC decision before recovering to around R16.70 at the start of the week.
Nolan Wapenaar, head of fixed income at Anchor, said the initial sell-off was expected but had overshot. "We think that the sell-off perhaps overshot a little and has come back a bit since the MPC decision," he said.
