The ZAR is expected to be weak in the near future, although lesser than what was witnessed in 2015. If South Africa's local government elections are not disrupted and if the February budget is well received, the country will avert a downgrade. The SARB is expected to raise rates by just 100bp, as compared with over 150bp hike forecast by markets.

"We think the market is too hawkish on domestic policy rates and, consequently, recommend receiving the belly 7-month area of the forward curve", says Barclays.