Rand vulnerable as protests continue
Johannesburg - South Africa's rand was steady against the dollar on Friday after heavy losses earlier in the weak after a downbeat medium-term budget, but remained vulnerable to investors' concerns over the struggling economy.
Investors were also keeping an eye on week-long protests by university students protesting against higher fees, the latest sign of unrest in Africa's most advanced, but ailing economy.
The local bourse opened slightly firmer, with the blue-chip Top 40 index up 0.6 percent while the All-share index rose 0.5 percent.
By 07h15 GMT, the rand was trading 0.47 percent firmer at 13.3425 against the dollar compared with where it ended Thursday's session in New York.
Government bonds were also firmer, with the yield for debt due in 2026 slipping 4.5 basis points to 8.34 percent.
The rand has recouped some of its losses after weakening nearly 2 percent on Wednesday after Finance Minister Nhlanhla Nene cut the growth forecast and indicated the budget deficit would remain under pressure for the next three years.
But despite a generally risk-on environment, the rand is still underperforming its emerging market peers, with analysts pointing to concerns about the student protests which turned violent outside Parliament on Wednesday as Nene delivered his budget speech.
“The underperformance... will probably only be unwound next week, if and when the situation stabilises,” Rand Merchant Bank currency analyst John Cairns said.Reuters