Johannesburg| Thursday
THE South African fiscal authorities’ bid to clamp down on forex speculators has backfired, sending the rand to a record low of R11 to the dollar on Wednesday, traders said.
A trader said the currency hit R10,992/$ – when some dealers would have paid more than R11 – before improving to R10,82 by Wednesday evening.
Said the trader: ”There is no supply of foreign exchange.
”I would suggest the rand is in a situation where it is crashing, and the bond market is also crashing.”
He added, ”This is not necessarily the end of the crash, there could be more.
”There are no resistance or support levels.”
Traders said government attempts to rebuff speculators, requiring foreign banks to show proof of underlying trade when operating in the forex market, had had the opposite effect, and the rand was now being bid into only one direction.
Business Day reports that pressure was mounting on the Reserve Bank to stabilise the currency.
The newspaper said that some currency traders had suggested that government approach the International Monetary Fund for a loan, ”possibly in the form of a large dollar denominated credit line,” that could be used to settle the country’s forward book.
Meanwhile, the JSE overall index gained 1,87% to close at 9830.
Banks and financial services indices were on the ropes Wednesday while resources stocks recorded exceptional gains as investors pumped R4,6-billion through the market.
Steel producer Iscor rocketed 14,11% to R9,30.
Following overnight Nasdaq gains, the IT index closed 4,61% higher. Dimension Data soared 7,31% to R14,54 while Datatec added 12,84% to R16,70.
Sasol gained 4,41%, Richemont closed up 5,23%, Anglogold soared 7,28% and Gold Fields added 6,47%, while Impala Platinum Holdings moved up 6,61%, Pick n Pay Stores shed 5,46% to R11,25.
The R153 bond was at 11,25 percent.- – Sapa