Reserve Bank speculation spooks rand

The rand tumbled over 2% against the dollar on Friday after the South African Reserve Bank signaled there would be an important weekend announcement, sparking panic selling of the rand and spooking bond traders into pulling their prices.

The rand fell 2.6% against the dollar to a nine-day low of 7.7803, off a close of 7.5845 in New York on Thursday.

But it firmed back to 7.7390 in later trade as the market was calmed by talk that the central bank announcement would not be alarming.

The local unit had taken a weaker tone for most of the day as a Greece bailout deal was further delayed, prompting investors to dump risky assets.

It extended losses sharply after the central bank signaled a Saturday announcement of “national importance” by President Jacob Zuma with Finance Minister Pravin Gordhan and Reserve Bank governor Gill Marcus.

“Once the rumours started to fly about the central bank we saw some panic buying, offshore banks especially were nervous about that, buying dollars,” a local currency dealer said.

Low exposure
Most bond traders immediately stopped dealing, not wanting to expose themselves to the uncertainties.

Yields ended little changed from Thursday’s close as the market thinned and dealers tried to position for Saturday’s announcement.

The yield on the 2015 bond ended up 2 basis points at 6.64% and the 2026 issue was up 2.5 basis points at 8.31%.

“No one is prepared to make a price given all the uncertainty. As soon as it was announced, traders pulled their prices immediately,” said Richard Farber of WWC Securities.

But the Mail & Guardian has heard from reliable sources that the governor is not exiting the bank and that the imminent announcement is more of a “celebratory” nature relating to the importance of the date.

Market talk is that the central bank is minting a new coin in honour of former president Nelson Mandela to commemorate the anniversary of his release from prison on February 11, 1990. — Reuters

Staff Reporter
Guest Author
Advertisting

R1.1-billion land claim “captured”

This story was produced in partnership with Pulitzer Center. Details of the land claim settlement for MalaMala, one...

Lekwa municipality won’t answer questions about why children died in...

Three children are dead. More than a dozen homes have been gutted by fires in the past six months. And, as...

Failure to investigate TRC cases during the Mandela era delayed...

Counsel for late trade unionist Neil Aggett’s family decries the slow pace of instituting an inquest into his death

SANDF colonel accused of swindling colleagues in UN business scam

A senior soldier who is part of South Africa’s peacekeeping missions is accused by her colleagues of swindling them out of of hundreds of thousands of rands in a nonexistent business deal
Advertising

Press Releases

South Africans unsure of what to expect in 2020

Almost half (49%) of South Africans, 15 years and older, agree or strongly agree that they view 2020 with optimism.

KZN teacher educators jet off to Columbia University

A group of academics were selected as participants of the programme focused on PhD completion, mobility, supervision capacity development and the generation of high-impact research.

From the desk of the President

From the desk of the President

New-style star accretion bursts dazzle astronomers

Associate Professor James O Chibueze and Dr SP van den Heever are part of an international team of astronomers studying the G358-MM1 high-mass protostar.

2020 risk outlook: Use GRC to build resilience

GRC activities can be used profitably to develop an integrated risk picture and response, says ContinuitySA.

MTN voted best mobile network

An independent report found MTN to be the best mobile network in SA in the fourth quarter of 2019.

Is your tertiary institution is accredited?

Rosebank College is an educational brand of The Independent Institute of Education, which is registered with the Department of Higher Education and Training.

Is your tertiary institution accredited?

Rosebank College is an educational brand of The Independent Institute of Education, which is registered with the Department of Higher Education and Training.