CAPE TOWN - The rand opened mostly directionless yesterday hovering at levels above R13.45 to the dollar before getting some much-needed inspiration from President Cyril Ramaphosa’s announcement that China would invest $14.7 billion (about R198 billion) in South Africa.
Ramaphosa’s announcement, at a news conference after talks with Chinese President Xi Jinping, sparked a rally in the rand spurring the domestic currency more than 1 percent firmer to a three-day best against the dollar, which according to analysts triggered some offshore demand for the currency.
At 5pm the domestic currency was bid 20c firmer than Monday’s same time bid, at R13.30 to the greenback. Against the pound, the rand rallied 21c to R17.50 and to the euro the local unit strengthened 23c to R15.57.
At 10:30 this morning the rand was at R13.25 to the dollar. The pound stood at R17. 42 to the dollar and the euro is at R15,49 to the rand.
Corporate treasury manager at Peregrine Treasury Solutions, Bianca Botes, said South Africa had been under pressure to secure foreign investment following a bout of corruption allegations within the ruling party and state-owned entities.
“A lack of investor confidence has been top of the agenda as the local economy remains under pressure with subdued growth and a tough emerging market backdrop, while geopolitical tension rages on,” she said.
Botes noted that US Treasury bond yields had risen to a five-week high as markets priced in expectations that the Federal Reserve would continue to raise interest rates in the coming months, adding pressure to the gold price as well as emerging market currencies.
Meanwhile, JSE stocks closed on a positive note, with the blue chip Top40 index stacking up 1.01percent to 50989.64 points, while the broader all share index increased by 0.88percent to 57054.84 points.
Among the top gainers, Anglo American Platinum scored 7.11% growth to R385.60, followed by Glencore, which gained 4.46% to R57.40.
Anglo American ticked up 4.33% to R295.10, Northam Platinum added 4.3% to R36.62 and African Rainbow Minerals was 4.3% higher at R114.
The biggest losers were Brait, which declined 3.22percent to R41.20, followed by Vodacom, which gave up 2.6percent to R125.51. Steinhoff African Retail fell 2.01 percent to R16.56.