The South African Rand which lost 19% against the US dollar should regain value by the end of this year, analysts of Absa Bank (precedently Barclays Africa) think according to a report by Bloomberg.

The experts explain that the capital flight experienced by South Africa would come to an end. Indeed, the government raised the maximum investment institutional investors (pension funds and asset managers) could make outside the country. However, this maximum is reaching its limit and, once that limit is reached, those institutions are obliged to channel their investments towards South African financial products. For Mike Keenan, Absa analyst, this should reduce the foreign currency demand and restore the vigor of the local currency.

According to the Institute of International Finance that monitors the dynamic of the international finance, South Africa, whose current account is already impacted by the drop in commodity prices, is the economy which has been most affected by the fiscal and monetary policy adjustments made by the USA.  

In a recent report, Morgan Stanley indicates that South Africa could be more affected if the USA continues with its bid (which is no more than a normalization) to abandon the quantitative easing.

Idriss Linge