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Johannesburg - The rand firmed against the dollar and yields
on South African debt fell on Friday morning after the Reserve Bank kept
interest rates unchanged in the previous session.
The Reserve Bank cut its 2012 growth forecast to 2.6% from
the 2.7% predicted in July, saying the continent’s biggest economy was expected
to remain weak because of poor global growth and disruptions to mining output.
The rand was at R8.28 at 06:57 GMT against the dollar, from
Thursday’s New York close of R8.3230.
“The actual statement was more dovish than most would have
expected, which suggests there is still some room for monetary easing,” said
Jonathan Myerson, head of fixed income at Cadiz Asset Management.
“The euro has firmed a little bit against the dollar, which
should help the rand strengthen against the dollar.”
The euro edged higher after suffering its biggest one-day
fall in over a month after a batch of surveys showed eurozone business remained
weak despite the European Central Bank’s bold efforts to tackle the region’s
debt crisis.
Inflation was expected to remain within the target range but
the bank saw the rand exchange rate as a potential risk particularly “in the
event of an unsustainable widening of the current account deficit”.
Yields on the benchmark bonds fell, with that on the three
year bond slipping 2 basis points to 5.39% and the longer-dated 14-year issue
losing 3.5 basis points to 7.47%.
Treasury is selling a total of R800m spread over inflation-linked I2025, I2050 and I2038 government bonds on at 09:00 GMT.
