Rand draws strength from hawkish SARB

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NewRandMoney

Reuters.

Johannesburg - South Africa's rand retreated slightly against the dollar on Friday after strong gains the previous day, but should hold its own in the short term after the Reserve Bank signalled it would hike interests rates further this year.

The local unit traded at 10.5975 to the greenback at 18:11 SA time, just O.17 percent off Thursday's close.

Government bonds also softened.

Yields rose 3 basis points to 8.375 percent for the 2026 benchmark and half a basis point to 6.805 percent for the instrument maturing in 2015.

The rand had gained nearly 1 percent against the dollar on Thursday, after the Reserve Bank left its repo rate on hold but made clear it would act swiftly to raise it whenever necessary to combat inflation pressures.

“The rand was a clear out-performer among (emerging market) peers yesterday as the market reacted positively to the South African Reserve Bank outcome,” Tradition Analytics said.

“Dollar-rand closed below key prior lows of 10.6000 and although some short covering could unfold into the weekend after a number of consecutive sessions lower, the bias remains to the downside in the short term.” - Reuters


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