South Africa's rand will remain resilient in the short term in the absence of policy surprises and further downgrades, but the currency will weaken towards a December conference of the ruling African National Congress, a Reuters poll showed.

The poll of up to 40 strategists suggested the rand would trade five percent weaker at 13.99 against the greenback at the end of October. This compares with a forecast of 13.78 to the dollar in the previous poll a month ago.

At its December conference, the ANC is due to pick a successor to President Jacob Zuma, who has become a focus of mounting public discontent over government missteps, rising unemployment and a stagnant economy. He made a hasty exit from a May Day rally on Monday after being booed by workers.

Despite credit downgrades, political tensions and a change of guard at the Treasury last month, however, South Africa's currency has had a strong start to the year, buoyed by a narrower current account deficit and investors shunning low interest rates in developed markets for higher yields.

The repo rate is expected to remain on hold until 2020 at least while inflation will likely hover just below 6 percent this year and ease slightly to 5.8 percent next. 

However, Peter Attard Montalto at Nomura warned that even though forecasts showed resilience in the short term, "investors are sort of waiting for stuff to actually happen," in the form of policy direction from the new Finance Minister Malusi Gigaba.

The ANC is also due to hold a conference at the end of June to review policy and make recommendations on amendments or new strategies.

Last month Gigaba said South African investors wanted the ANC to explain in detail what the "radical economic transformation" it has pledged in recent speeches means.  

Annabel Bishop, economist at Investec wrote in a note that while global risk-on counteracted much of the immediate impact of the downgrades, the rand would probably remain volatile for now.

Credit agencies Standard & Poor's and Fitch Ratings Agency have downgraded South Africa to junk status with negative outlooks, and both Montalto and Bishop said further ratings downgrades were still a risk.

However, Reuters data showed non-residents racked up healthy net purchases of South African bonds in the first quarter of this year.

Data from the Institute of International Finance (IIF) on Tuesday showed emerging markets saw a fifth straight month of net 'non-resident' portfolio inflows in April, their best run since the first half of 2015.

"I think there has been a little more risk-on environment as well after the first round of the French election, global data keeping up pretty well and lower oil prices also somewhat conducive," said Montalto.


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