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Johannesburg - The rand steadied against the dollar on Friday after tumbling to near six-month lows overnight, with central bank dollar-buying and foreigners' unbundling of local debt seen keeping pressure on the currency.
At 06:42 GMT the rand traded at R7.2710 against the dollar, little changed from Thursday's close in New York of R7.2605.
The rand fell more than 1.7% to R7.3001/dollar on Thursday - pushing through its long-term moving average and reaching its weakest level since September 2 last year - with some traders citing dollar demand from offshore hedge funds.
Rand Merchant Bank said in a research note the rand had underperformed peers since the start of this year, with the currencies of Australia, New Zealand, Canada and Brazil all remaining relatively strong.
"It seems that the two most obvious factors are that foreigners have been selling bonds, and we've heard that the central bank has been buying dollars aggressively," RMB currency analyst John Cairns told Reuters.
Foreigners have sold a net R9.15bn of South African government bonds since the start of the year, according to data from the Johannesburg stock exchange.
The currency gained about 12% against the dollar last year, triggering concerns about the export sector, and the Reserve Bank has said it will intervene to build up foreign exchange reserves whenever appropriate, a move seen capping rand strength.
The benchmark 2015 government bond R157 extended Thursday's losses, with the yield subsequently adding four basis points to 7.96%. The yield on the 2026 note R186 was unchanged from its previous closing level of 8.765%.
At 06:42 GMT the rand traded at R7.2710 against the dollar, little changed from Thursday's close in New York of R7.2605.
The rand fell more than 1.7% to R7.3001/dollar on Thursday - pushing through its long-term moving average and reaching its weakest level since September 2 last year - with some traders citing dollar demand from offshore hedge funds.
Rand Merchant Bank said in a research note the rand had underperformed peers since the start of this year, with the currencies of Australia, New Zealand, Canada and Brazil all remaining relatively strong.
"It seems that the two most obvious factors are that foreigners have been selling bonds, and we've heard that the central bank has been buying dollars aggressively," RMB currency analyst John Cairns told Reuters.
Foreigners have sold a net R9.15bn of South African government bonds since the start of the year, according to data from the Johannesburg stock exchange.
The currency gained about 12% against the dollar last year, triggering concerns about the export sector, and the Reserve Bank has said it will intervene to build up foreign exchange reserves whenever appropriate, a move seen capping rand strength.
The benchmark 2015 government bond R157 extended Thursday's losses, with the yield subsequently adding four basis points to 7.96%. The yield on the 2026 note R186 was unchanged from its previous closing level of 8.765%.
