Rand hits two-and-a-half year high to the dollar as net tightens around Guptas
The rand was firmer against major global currencies on Tuesday morning, bolstered by positive sentiment that local authorities would begin cracking down on rent-seeking within the government.
The rand hit an intraday best of R12.19, a level last seen in July 2015, despite a weaker euro.
Analysts have cited general positive sentiment regarding local developments and recent dollar weakness for the local currency’s strength.
News on Monday that the National Prosecuting Authority (NPA) was targeting the Gupta family with arrest warrants had provided the local currency with some support overnight.
On Tuesday, the High Court in Pretoria authorised the freezing of R1.6bn in assets earned by global consultancy McKinsey and partner Trillian, which is linked to the controversial Gupta family, Reuters reported.
Herenya Capital Advisors trader Petri Redelinghuys said the rand had underperformed many of its emerging-market peers recently due to negative political headlines and corruption.
The positive sentiment around the election of Cyril Ramaphosa had therefore cleared the path for rand strength, said Redelinghuys.
The rand’s recent gains also comes amid a backdrop of general dollar weakness. The greenback has been under pressure from both domestic politics in that country and market speculation monetary policy tapering in the US could be a little slower than in the EU.
German and UK inflation data due later on Tuesday was expected to be closely watched.
At 11.30am the rand was at R12.2615 to the dollar from close of R12.3089, at R14.9919 to the euro from R15.0969 and at R16.886 to the pound from R16.9808.
The euro was at $1.2226 from $1.2267.