Rand remains firmer on shaky dollar
The rand held its ground on Wednesday afternoon, with a weaker dollar environment playing a supportive role.
Despite being stronger, however, the rand’s moves over the past 24 hours have been contained relative to other currency pairs.
The local currency has enjoyed a tremendous run since December, making it vulnerable to short-term pull-backs.
Speaking in Parliament, President Cyril Ramaphosa acknowledged the stronger rand environment, saying that it demonstrated investor confidence. He urged social partners to unite to promote economic growth and transformation.
Ramaphosa has played a key part in reviving optimism by overseeing decisive measures to fix corporate governance at some of the key state-owned entities, which have been a big drag on the fiscus for year.
Markets are closely watching the direction of the dollar, and are awaiting the results of the latest review on SA’s debt by ratings agency Moody’s.
Moody’s is the only major ratings agency to still rate SA’s rand and foreign-currency denominated debt at investment grade. Fitch and S&P Global cut the country’s debt to junk in 2017.
Finance Minister Nhlanhla Nene again expressed confidence on Tuesday that SA would stave off a ratings downgrade from Moody’s, which is expected to release its report next week.
Nene spoke to Business Day from London, where he was leading a South African delegation. The group met all three rating agencies as well as potential investors.
At 3.02pm, the rand was at R11.7705 to the dollar from R11.8099, R14.5569 to the euro from R14.6345 and at R16.4350 to the pound from R16.4950.