Johannesburg | Monday
SOUTH Africa’s rand opened slightly firmer on Monday, encouraged by news that Zimbabwean President Robert Mugabe had approved a deal to halt illegal land invasions, but traders said the mood was still wary.
At 0645 GMT the currency was trading a cent firmer at 8,47 against the dollar, but had eased off an opening level of 8,45 which is seen as a key level to break for a substantial recovery.
Last week, it sank to a new record low of 8,53 against the US unit amid mounting concerns of Zimbabwe’s deepening political and economic crisis.
News of a Nigerian-brokered deal to end the occupation of mainly white-owned land in Zimbabwe in exchange for financial support from former colonial power Britain for a legal land reform programme had sparked hopes of a sustained recovery.
”The guys are still pretty sceptical as far as the whole Zimbabwe issue is concerned,” a Johannesburg-based trader said.
”There’s still a chance we may drift lower to the 8,43 level but that will be pretty much it for now,” he said.
Against the euro, the rand was stable at 7,68, but it was six cents weaker against the pound at 12,38 within striking distance of its latest low of 12,40 reached last week. It has lost about eight percent of its value on a trade-weighted basis this year, versus 12,5 percent last year.
Bonds managed to extend gains, with hopes still high for falls in August inflation data due on September 18 and a rate cut from the central bank at its monetary policy a few days afterwards.
Yield on the most traded R150 bond due 2005 and the R153 due 2009 were both three basis points lower at 10,08% and 10,73% respectively. – Reuters