Citigroup has closed its bullish position on the South African rand against the euro, reversing its stance just hours after the South African Reserve Bank (SARB) surprised markets by holding its repo rate steady.
The move marks a sharp pivot for the bank, which had previously maintained a long rand exposure despite warning that the currency remained vulnerable to downside risks.
The decision to unwind the position follows the SARB's Thursday announcement, which caught many traders off guard given the prevailing expectations for a rate adjustment.
By exiting the trade so quickly, Citi is signaling that the central bank's pause has reinforced its view that the rand's fundamentals are not yet strong enough to support a sustained rally against the euro.
This reversal underscores the heightened sensitivity of emerging market currencies to monetary policy shifts in South Africa.
The rand has faced persistent pressure from domestic economic headwinds, and the SARB's decision to hold rates has likely intensified concerns about the currency's near-term trajectory.