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Johannesburg - The rand was largely flat against the dollar on Thursday with domestic factors including strikes and protests likely to keep the currency under pressure in the medium term.
Government bonds yields closed higher as the debt market continues to price in the likelihood of further monetary tightening this year as the Reserve Bank seeks to rein in inflation.
The 2026 paper which the secondary market uses as a benchmark was up 4.5 basis points at 8.765% while the 2015 bond at the shorter end of the curve added 5.5 basis points to 7.165%.
By 17:14 GMT the rand was trading at R11.0100/$ to the greenback, unchanged from its previous close and off the session's low of R11.1225/$.
The rand remains hostage to a myriad of domestic problems, including mine strikes and township protests against poor basic services, which have clouded the outlook for Africa's biggest economy.
Thanks to wide fiscal and current account deficits, South Africa also ranks among the "fragile five" emerging market economies whose currencies tend to be hardest hit during episodes of global risk aversion.
But stronger demand from Europe and the United States could underpin South African export growth this year, easing pressure on the rand, Moody's said in a note on Thursday.
"We expect these movements to result in a narrower current account deficit for South Africa over the next year ... and a gradual stabilisation of cross-border capital flows and the exchange rate," said Moody's analyst Kristin Lindow in a note.
"However, possible surprises in the domestic political sphere and uncertainty about global growth prospects should Chinese demand falter, continue to represent risks for the South African economy and thus for the rand," she added.
Government bonds yields closed higher as the debt market continues to price in the likelihood of further monetary tightening this year as the Reserve Bank seeks to rein in inflation.
The 2026 paper which the secondary market uses as a benchmark was up 4.5 basis points at 8.765% while the 2015 bond at the shorter end of the curve added 5.5 basis points to 7.165%.
By 17:14 GMT the rand was trading at R11.0100/$ to the greenback, unchanged from its previous close and off the session's low of R11.1225/$.
The rand remains hostage to a myriad of domestic problems, including mine strikes and township protests against poor basic services, which have clouded the outlook for Africa's biggest economy.
Thanks to wide fiscal and current account deficits, South Africa also ranks among the "fragile five" emerging market economies whose currencies tend to be hardest hit during episodes of global risk aversion.
But stronger demand from Europe and the United States could underpin South African export growth this year, easing pressure on the rand, Moody's said in a note on Thursday.
"We expect these movements to result in a narrower current account deficit for South Africa over the next year ... and a gradual stabilisation of cross-border capital flows and the exchange rate," said Moody's analyst Kristin Lindow in a note.
"However, possible surprises in the domestic political sphere and uncertainty about global growth prospects should Chinese demand falter, continue to represent risks for the South African economy and thus for the rand," she added.
