The Aussie dollar is looking more like the South Pacific peso at the moment, but Australia is not alone in fending off the commodity currency backlash. South Africa's market is under similar pressure, and South African Reserve Bank governor Gill Marcus is not having a good time of it when it comes to guiding the markets out of the turmoil. From the emerging markets team at Danske Bank on Thursday (our emphasis): South African Reserve Bank (SARB) governor Gill Marcus spoke out twice this week in reaction to the recent sharp sell-off in South African assets and in an attempt to calm the markets. Following the first speech - in which she said that risks to inflation are skewed to the upside and that despite the central bank being likely to cut the GDP forecast due to the strikes the bank's core mandate is price stability - yields went up as the market started pricing in rate hikes quite aggressively. However, later in the week Marcus tried to put more light into what she said earlier this week and basically said that the markets had misinterpreted her previous comments and while inflation risks are on the upside, the bank can tolerate inflation at the upper limit and that monetary policy remains accommodative. What SARB governor Marcus tried to say on Thursday was that while room for further manoeuvre (further easing) is very limited, she indicated that markets should not price in early rate hikes as monetary policy remains accommodative. Her comments bode well for our outlook for monetary policy in South Africa as we expect the SARB to stay on hold throughout 2013. The outlook for the rand remains the same. We remain bearish on it and do not consider the recent sell-off to be a buying opportunity. The continued domestic socio-economic problems, uncertain outlook for global monetary policy, drop in commodity prices and last but not least, the unsustainably high current account deficit represents risks for further depreciation of the rand. Here, meanwhile, is the recent performance of the ZAargh!: