Executive Summary

We look at oil as an indicator of the bias in future rand movements. We find this useful because the movement of oil captures many global dynamics that the rand is also subject to. If Brent crude oil goes back to USD45/bbl, the relationship between the currency and oil suggests the rand should move closer to 15.50 against the USD. Although it would be naïve to assume that the rand will not be volatile, we continue to hold the view that the rand has reached a broad top, and maintain a target of 15.00 against the USD. We think of this as a six- to nine-month view.