Deputy President Cyril Ramaphosa. File photo: Kopano Tlape/GCIS
JOHANNESBURG - Deputy President Cyril Ramaphosa’s charm offensive at the World Economic Forum (WEF) and a marked dollar weakness yesterday saw the rand breach the R12 against the dollar mark for the first time since 2015.

The US dollar index, which tracks the US currency against a basket of other major currencies, traded at its lowest point since December 2014 on the day.

The dollar extended its losses on the back of comments from US Secretary of the Treasury, Steve Mnuchin, who said he favoured a weak dollar to support US exports, at the World Economic Forum (WEF).

This saw the rand breach the R12 mark against the greenback and briefly touch an intra-day high of R11.92.

The domestic unit was bid at R11.95 at 5pm, with the JSE all-share index also extending its winning streak, closing at a new record high of 61623 buoyed by gold mining stocks, which ended the day 3.57percent higher.

Investec chief economist Annabel Bishop said: “Positive comments from South African officials in Davos about ending corruption, repairing state-owned enterprise governance, health of public finances, maintaining key institutional strengths and promoting economic growth have also assisted in lifting the domestic currency.”

Team SA has enjoyed a stellar stay at Davos with Ramophosa, the new ANC president, drawing plaudits from the International Monetary Fund (IMF) for his commitment to reforms to grow the South African economy.

IMF managing director Christine Lagarde said after a meeting with Ramaphosa that recent initiatives to improve governance and strengthen public institutions were steps in the right direction.

“We concurred that long-standing structural challenges continue to weigh on growth in South Africa. We consequently agreed that bold and timely reforms are needed to create an environment conducive to job creation and less inequality."

Lagarde’s comments come on the heels of the IMF earlier this week slashing South Africa’s growth forecast for the next two years, highlighting political uncertainty as hindering investments in the country.

Meanwhile, higher transport costs in December saw the inflation rate for last month inch up 4.7percent year-on-year, up from a 4.6percent gain in the prior month and matching market expectations. The rise stemmed almost entirely from petrol price inflation of 14.2percent.

But William Jackson, a senior emerging markets economist at Capital Economics, said inflation would ease over the first half of this year and would average 5.1percent this year, down from 5.3percent last year.