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JOHANNESBURG - The rand was stronger on Tuesday and yesterday as positive inflation figures and the likelihood the country would avoid a downgrade by Moody’s soothed sentiment ahead of an anticipated lending rates increase in the US last night.

At 5pm yesterday, the rand bid at R11.9173 to the dollar, 13.11cents firmer than at the same time on Monday, beating fellow emerging market currencies which traded weaker as investors treaded cautiously ahead the US Federal Reserve meeting.

“Investors are less concerned with about the downgrade than before. It’s a combination of political confidence and the reprieve led to stronger demand even though other EM’s are down,” said analyst at ETM Analytics, Halen Bothma.

All but two of the 18 economists polled by Reuters this week said the country would avoid a credit rating downgrade by Moody’s when it publishes its review tomorrow.

Data by Statistics SA showed headline inflation slowed to 4percent year-on-year in February from 4.4percent in January, raising the chances of a lending rate cut by the local central bank next week.

In fixed income, the yield for the benchmark government bond due in 2026 was down 10 basis points at 8.06percent.

Meanwhile, stocks were slightly firmer on Tuesday as emerging stocks globally snapped a recent losing streak struggled higher, with shares of companies exposed to the local economy amongst the day’s winners.

The benchmark JSE Top40 index gained 0.35percent to 51615.22 points, while all share index closed slightly higher by 0.34percent to 58288.87 points and after strong performances from retailers and industrials.

The banking index rose 0.76percent on the day, with RMB Holdings up 3.31percent to R83.67 and FirstRand gaining 1.49percent to R70.80.

Embattled retailer Steinhoff International was among the worst performers, falling 8.74percent to close at R3.55 after reports that it was considering the sale of some of its Steinhoff Africa Retail shares in efforts to cut debt.

Its unit Steinhoff Africa Retail slumped 3.93percent to R21.04 on fears that a sell down by parent would most likely be carried out on a discount.

- REUTERS