South Africa’s rand was back above 10,0/dlr in early Friday trade as it struggled once again to make its visits in coveted single-digit territory more than
brief.
At 0650 GMT, the rand was at 10,02/dlr, about three
cents weaker than its late Thursday level. The currency, which has strengthened about 20% this
year after sliding 37% in 2001, has been consistently
repelled from the psychologically crucial 10,0/dlr level, suggesting gains below there will be tough to sustain. Importer demand is also seen kicking in at these levels as importers snatch the cheapest greenbacks they have seen for some time. The rand’s brief break below 10,0/dlr on Tuesday was its
first in over three months.
Its rally has been fuelled by attractive yields from steep local interest rates — but those same rates are a double-edged sword as they are seen stifling the economic growth needed to attract the foreign capital that the currency needs for support.
Bonds were steady and significant moves were not seen as the market consolidates at current levels after recent gains based on an improving interest rate outlook. The yield on the short-dated R150 was stable at 11,93%. The yield on the longer-dated R153 was
also steady at 11,625%. – Reuters