The South African rand edged firmer in European trading as the US dollar retreated on the final day of what has been a volatile week for financial markets. Picture: Karen Sandison/African News Agency(ANA)
The South African rand edged firmer in European trading as the US dollar retreated on the final day of what has been a volatile week for financial markets. Picture: Karen Sandison/African News Agency(ANA)

Rand trades stronger against the dollar

By Dhivana Rajgopaul Time of article published Feb 1, 2021

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JOHANNESBURG - The South African rand edged firmer in European trading as the US dollar retreated on the final day of what has been a volatile week for financial markets according to NKC Research.

South African Reserve Bank Governor Lesetja Kganyago indicated in a Bloomberg interview on Thursday that the bank has room to respond to the demand side impact of pandemic-related income disruptions, but stressed that the process is data dependent.

On Friday, the Automobile Association warned that a hefty fuel price increase is on the cards in February, primarily due to higher international crude prices.

At the close of local trade, the rand quoted 1.0 percent stronger at R15.05/$, after trading in range of R14.95/$ - R15.29/$.

Households hesitant to take on more debt

The latest private sector credit sector extension data from the South African Reserve Bank (Sarb) indicates that households are reluctant to take advantage of the low-interest environment.

The reluctance of consumers to spend was also evident in November, as consumers were hesitant to take retailers up on the normal ‘Black Friday’ deals.

The data suggests that consumers are reluctant to spend during these uncertain times, while corporates have also faced a tough year in 2020.

On aggregate, claims on the domestic private sector have recorded its slowest growth rate since 2009.

BUSINESS REPORT ONLINE

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