Share

Rand dips on lower forex reserves

Johannesburg - The rand weakened against the dollar on Tuesday as data showed foreign exchange reserves fell in April and continued worries about eurozone debt problems kept pressure on emerging market assets seen as carrying higher risk.

However, comments by Reserve Bank Governor Gill Marcus that the inflation trend suggests there is little room to cut interest rates should support the rand by attracting offshore investors in search of yield.

By 07:04 GMT the rand was trading 0.34% weaker at R7.8265 against the dollar from Monday’s close at R7.80.

"It’s a quiet start. We should see bids at the R7.80/R7.79 level. Buying dips is still the way to go after the sell-off we had yesterday," said Jan Defouw, a trader at Standard Bank.

The unit was at R7.8150 before a central bank report at 06:00 GMT showed South Africa’s net gold and foreign exchange reserves dipped to $48.823bn in April while gross reserves fell to $49.942bn.

The decline was due to foreign repayments made on behalf of the government, the Reserve Bank said. The Bank has previously said it would take advantage of a stronger currency to boost reserves, but insists it does not target a level for the rand.

Government bonds tracked the rand weaker, with yields for the three-year benchmark and the longer-dated 14-year paper each adding two basis points to 6.445% and 8.17% respectively.

A weekly government bond auction at 09:00 GMT, where the Treasury is offering R2.1bn of paper, should give pointers on market appetite for South African debt.

 
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.96
-0.1%
Rand - Pound
24.04
+0.3%
Rand - Euro
20.55
+0.2%
Rand - Aus dollar
12.34
+0.6%
Rand - Yen
0.13
+0.8%
Platinum
900.98
-0.2%
Palladium
1,000.76
-0.5%
Gold
2,155.89
-0.2%
Silver
24.95
-0.4%
Brent Crude
86.89
+1.8%
Top 40
65,751
-0.8%
All Share
71,995
-0.6%
Resource 10
53,013
-0.6%
Industrial 25
99,381
-1.1%
Financial 15
16,605
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders