Johannesburg - The rand remained near a three-and-a-half
year low on Monday and analysts said it could weaken further in the absence of
a resolution to a wave of strikes roiling Africa’s biggest economy.
The rand was trading at R8.800 to the dollar at 07:01 GMT on
Monday, barely changed from Friday’s New York close of R8.7900.
On Friday, it slumped to as low as R8.85 to the dollar, its
weakest level since April 2009, after Anglo Platinum [JSE:AMS] said it had fired
12 000 wildcat strikers.
Analysts said the rand could weaken to as low as R9.00 to
the dollar unless measures were taken to limit some of the worst labour unrest
since the end of apartheid in 1994.
“The market is trading purely on emotion and sentiment,”
said Garth Klintworth, head of fixed income, commodities and currencies at Absa
Capital.
“Either we get some strong leadership from trade unions or
government or business that improves sentiment or we continue to see very poor
sentiment and weakness relative to the dollar. Technically, we could easily get
to R9.20.”
Government bonds continued to sell off on Monday, with the
yield on the 2015 bond up 8 basis points to 5.51%.
That on the 2026 paper was 15 basis points higher at 7.81%,
its highest level since July.
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