Johannesburg - South Africa's rand pulled back from the previous day's 8-month lows on Tuesday as calm returned to a market spooked by news of Pretoria signing a major nuclear power deal with Russia.
South African officials clarified that the agreement signed with Russian atomic agency Rosatom was part of a tender process that would involve other countries and not a contract to build power plants.
At 17:15 SA time the rand traded at 11.1470 to the greenback, slightly firmer than Monday's close in New York.
Government bonds also edged up, pulling the yield for the benchmark 2026 government bond 1 basis point lower to 8.175 percent.
The rand stumbled to 11.1890 overnight, its weakest since early February, as investors wondered how South Africa would be able to afford the reported $10 billion price tag of the deal.
A deal with Russia might also hurt South Africa's international standing because of Moscow's role in the Ukraine crisis, traders said.
“Some of the headlines yesterday seemed to aggravate the market and didn't inspire any sort of confidence given that Russia is regarded as a bit of a pariah at the moment,” Nedbank rand trader William Van Rijn said.
“Today the euro was somewhat stronger and that gave the market a little bit of comfort. We have also seen some possible profit-taking of dollar selling into this market,” he added. - Reuters