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The Committee cautioned that it would be ‘monitoring developments abroad’ before it takes the much-anticipated step of raising interest rates.

Locally, there was some good news. Firstly, headline consumer price inflation (CPI) remained between the limits set by the Reserve Bank and, secondly SA’s current account deficit narrowed to 3.1% of gross domestic product. Furthermore, on 23 September 2015 the Monetary Policy Committee decided unanimously to keep the repo rate unchanged at 6%. However, citing concerns around mining and manufacturing contractions, as well as low business and consumer confidence, the Reserve Bank also revised its 2015 growth forecast down to 1.5%.

With more capital fleeing emerging markets in the anticipation of interest rate normalisation in the US and the slowdown of the global commodity sector, the rand weakened further during September: 4.0% against the US dollar, 3.7% against the euro and 2.7% against the British pound.

The FTSE/JSE All Share Index gained 0.95% on a total return basis in rand during September 2015. But because of the weakening of the rand, dollar investors would have lost 3.1% for the month. The biggest losers during the quarter in rand terms were Basic Materials (-8.93%) and Technology (-11.29%). Inflation-linked bonds and the All Bond Index (ALBI) lost 0.31% and 0.07% respectively. Cash gained 0.52% during the month.

Internationally, the MSCI World Index lost 3.6% on a total return basis in US dollars, while the MSCI Emerging Markets Index declined by 3.0%

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