The South African rand was ignoring news from Zimbabwe that opposition leader Morgan Tsvangirai had been arrested as the Movement for Democratic Change launched a week-long “final push”.
Tsvangirai had been planning to lead mass street protests against President Robert Mugabe early on Monday morning. Police obtained a court order at the weekend banning the march.
At 0915, the rand was trading at 8,1380 to the dollar from a New York close of 8,0779 on Friday, 7,8506 on Thursday, 8,1752 on Wednesday, and 8,0950 on Tuesday.
It was quoted at 9,5209 against the euro from a previous close of 9,4423 and at 13,2685 against sterling from a previous close of 13,1185.
The euro was quoted at $1,1699 from $1,1715 late on Friday, $1,1904 late on
Thursday, $1,1751 late on Wednesday, and $1,1812 late on Tuesday. Gold was
quoted at $361,60 an ounce from a previous close of $364,40 and last Monday’s
close of $370,30.
“The rand is range-trading at the moment, as we absorb the news from Zimbabwe and the lack of action by the central bank to a 1,9 percentage point drop in their inflation target measure, which should have prompted a cut in interest rates of equal magnitude,” a currency trader said.
Another trader said the weak euro and gold price should put pressure on the rand dollar exchange rate and he expected the rand to reach 8,17 rand per dollar shortly.
Statistics South Africa on Friday revised consumer inflation data back to January 2002. The effect of the revision was to lower the March CPIX inflation rate to 9,3% y/y from a previous 11,2% y/y.
The South African Reserve Bank indicated that its net open position in foreign currency (NOFP) fell to $986-million in April from $1,220-billion at the end of March, $1,401-billion at the end of February, $1,489-billion at the end of January and $1,618-billion at the end of December.
During May, the government issued a 1,25-billion euro bond, the proceeds of
which were used to extinguish the NOFP. – I-Net Bridge