Rand firms slightly against dollar in early trade, but 'toughest week of the year' looms | Fin24
 
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Rand firms slightly against dollar in early trade, but 'toughest week of the year' looms

Mar 24 2020 11:02
Jan Cronje

The rand traded slightly firmer against the dollar in early trade on Tuesday, in the wake of President Cyril Ramaphosa's address on Monday evening, and as cautious signs of a more positive mood in Asia spread to other emerging markets currencies.

The local currency opened the day at R17.83/$ and was trading 0.6% firmer at R17.73 to the greenback at 10:30.

While gaining ground against the dollar, the local currency fell against the pound and the euro.

According to NKC African Economics, the South African currency garnered support as new measures announced by the US Federal Reserve stoked some life into risk currencies. The Fed on Monday announced that it is planning to buy unlimited US government bonds

But the NKC warned that rand is gearing up for "arguably the toughest week of the year" with a ratings assessment from Moody’s due Friday.

Moody's, the sole major credit rating agency to still assess South Africa at investment grade, downgraded its outlook for SA's credit rating from “stable” to “negative” in November 2019.

If Moody's does downgrade South Africa's sovereign credit rating, South African bonds will be ejected from Citigroup’s World Government Bond Index, which doesn’t allow bonds that are junk. This is expected to lead to an outflow of billions of rands.

coronavirus  |  rand
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