South Africa's rand is set to lose around 3 percent to the dollar in the next three months, hitting levels of around 7.20, as investors shy away from riskier assets, a Reuters poll showed on Wednesday. The poll of 31 analysts, taken this week, sees the rand weakening to 7.10 by the end of the month, before hovering at around 7.20 from the end of May.
The weakest forecast among the economists polled was for the rand to end February 2012 at 8.50 and the strongest level was for the currency to hit 6.10 against the greenback.
"We have some weakening in the rand, because we feel at the current rate it is over-valued and secondly the central bank still would like a weaker currency," said Nigel Rendell, senior strategist at RBC Capital Markets. The rand, which was trading at around 6.95 on Wednesday, has weakened over 5 percent against the dollar this year as the South African Reserve Bank (SARB) has been trying to stem its sharp gains. Headline inflation, as forecast by the January Reuters Econometer, was projected to average 4.49 percent for the year. In January, consumer price inflation accelerated to 3.7 percent year-on-year from 3.5 percent in December.