South African currency climbs as Fed policy makers prepare to convene

Tuesday saw the value of the South African rand climb against the world's reserve currency in anticipation of the policy-making arm of the U.S. Federal Reserve deploying additional monetary stimulus to spur economic growth and development, Bloomberg reports.

But the largest economy of the African continent also was dealing with the aftermath of its current account, which measures goods and services commerce, advancing to 6.4 percent during the second quarter of the year. That notches the biggest deficit since the third quarter of 2008.

"This is an unsustainable current account deficit," chief economist Kevin Lings with Stanlib told the Mail & Guardian. "What is bailing us out is our inclusion in the Global Bond Index, which has resulted in the massive inflows into our bond market. We will still end up with a record inflow into the bond market and that is what is helping us to finance this."

Economists had forecast the current account deficit to climb 4.7 percent, Mail & Guardian reports.

Gains to the rand of South Africa were attributable to high hopes for an easing announcement after the two days of meetings kick off Wednesday for the Federal Open Market Committee with the U.S. Federal Reserve, Bloomberg reports.