South Africa’s rand wobbled against the dollar on Thursday, ignoring the government’s assurance that it would not nationalise the mining industry, but exporters were seen wading in at the higher levels.
The rand slipped to 10,60 per dollar, with traders saying the unit’s failure to hold below the key 10,50 level in overnight trade had contributed to the weakness. At 0745 GMT it was trading at 10,5850 compared to 10,5375 overnight.
The currency briefly firmed to 10,4895 in offshore trade on Wednesday supported by the government’s statement that it would not nationalise the mining industry and would not target any percentages for black ownership.
”It’s a little bit too late, the market wanted a quick reaction from the government,” said one Johannesburg-based trader.
The government held talks with global mining giant Anglo American and its gold and diamond subsidiaries on Wednesday, following the leaking of a draft mining charter which caused panic in the financial markets.
The document was cited as one of the factors that contributed to the abrupt halt in the rand steady’s recovery against the dollar last week which trimmed the unit’s gains to just over 13% this year. It fell 37% last year.
”We are basically in a new range of 10,48-10,63. The statement on the mining charter is positive, but technically the rand needs to break below 10,45 before we can see real strength,” said another trader.
Traders said importer interest was expected just below 10,48, with exporters likely to offload dollars above 10,63.
Bonds were flat and expected to remain idle ahead of the release of July consumer inflation data on Tuesday.
The yield on the most traded R150 due 2005 was unchanged at 11,24%. The longer-dated R153 due 2010 was bid at 11,29% from 11,31% at close on Wednesday. – Reuters