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Rand near seven-month lows on Marcus news

Sep 19 2014 10:08
Reuters

Johannesburg - The rand held near a seven-month low against the dollar on Friday, looking set to end the week with a loss as markets took in the end of governor Gill Marcus' five-year term at the bank.

Marcus took markets by surprise on Thursday when she announced, after the bank had left interest rates unchanged at 5.75% as expected, that she would be stepping down at the end of her term in November.

The rand was testing seven-month lows against the dollar on Friday. At 06:48 GMT, it traded at R11.0875/dollar, compared with a R11.0750 close in New York on Thursday.

Analysts said the decline was a knee-jerk reaction to the announcement, underscoring the esteem in which Marcus was held by investors.

"The rand did not like the announcement that Governor Marcus will not stand for another term," Rand Merchant Bank's John Cairns said in a market note.

Dealers said the uncertainty of who will succeed Marcus was also making investors nervous.

"The way this has been handled is not the best: ideally there should have been a known succession plan in place months ago," Cairns said.

Yields on government bonds nudged down half a basis point to 8.235% on the benchmark 2026 bond, trading within Thursday's levels.

The National Treasury will be selling R800m in 2038, 2050 and 2025 inflation-linked bonds in the session. Results are due after auction closes at 09:00 GMT.

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gill marcus  |  rand  |  dollar  |  markets  |  currencies

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