20°C / 22°C
  • Sun
  • 17°C
  • 3°C
  • Mon
  • 21°C
  • 4°C
  • Tue
  • 22°C
  • 7°C
  • Wed
  • 22°C
  • 7°C
  • Thu
  • 19°C
  • 5°C
  • Fri
  • 21°C
  • 6°C
  • Sun
  • 16°C
  • 9°C
  • Mon
  • 16°C
  • 12°C
  • Tue
  • 14°C
  • 11°C
  • Wed
  • 16°C
  • 9°C
  • Thu
  • 16°C
  • 9°C
  • Fri
  • 15°C
  • 9°C
  • Sun
  • 19°C
  • 6°C
  • Mon
  • 20°C
  • 7°C
  • Tue
  • 24°C
  • 7°C
  • Wed
  • 23°C
  • 7°C
  • Thu
  • 21°C
  • 7°C
  • Fri
  • 24°C
  • 7°C
  • Sun
  • 21°C
  • 0°C
  • Mon
  • 22°C
  • 4°C
  • Tue
  • 22°C
  • 5°C
  • Wed
  • 23°C
  • 5°C
  • Thu
  • 22°C
  • 4°C
  • Fri
  • 22°C
  • 5°C
  • Sun
  • 22°C
  • 15°C
  • Mon
  • 25°C
  • 15°C
  • Tue
  • 22°C
  • 17°C
  • Wed
  • 20°C
  • 16°C
  • Thu
  • 23°C
  • 16°C
  • Fri
  • 21°C
  • 16°C
  • Sun
  • 20°C
  • 11°C
  • Mon
  • 16°C
  • 12°C
  • Tue
  • 19°C
  • 11°C
  • Wed
  • 18°C
  • 10°C
  • Thu
  • 19°C
  • 10°C
  • Fri
  • 16°C
  • 10°C
  • Sun
  • 16°C
  • 9°C
  • Mon
  • 14°C
  • 9°C
  • Tue
  • 13°C
  • 9°C
  • Wed
  • 15°C
  • 7°C
  • Thu
  • 14°C
  • 5°C
  • Fri
  • 14°C
  • 8°C
  • Sun
  • 16°C
  • 11°C
  • Mon
  • 15°C
  • 10°C
  • Tue
  • 13°C
  • 10°C
  • Wed
  • 16°C
  • 10°C
  • Thu
  • 15°C
  • 8°C
  • Fri
  • 14°C
  • 10°C
  • Sun
  • 20°C
  • 4°C
  • Mon
  • 21°C
  • 6°C
  • Tue
  • 25°C
  • 5°C
  • Wed
  • 24°C
  • 7°C
  • Thu
  • 22°C
  • 7°C
  • Fri
  • 24°C
  • 5°C
  • Sun
  • 17°C
  • -1°C
  • Mon
  • 20°C
  • 3°C
  • Tue
  • 20°C
  • 3°C
  • Wed
  • 20°C
  • 2°C
  • Thu
  • 22°C
  • 5°C
  • Fri
  • 20°C
  • 4°C
  • Sun
  • 16°C
  • 7°C
  • Mon
  • 26°C
  • 5°C
  • Tue
  • 26°C
  • 7°C
  • Wed
  • 21°C
  • 5°C
  • Thu
  • 22°C
  • 7°C
  • Fri
  • 23°C
  • 6°C
  • Sun
  • 21°C
  • 10°C
  • Mon
  • 15°C
  • 10°C
  • Tue
  • 18°C
  • 9°C
  • Wed
  • 17°C
  • 7°C
  • Thu
  • 18°C
  • 9°C
  • Fri
  • 15°C
  • 8°C

#RandReport: Rand falls after Reserve Bank rate cut

The rand traded as much as 1% weaker versus the dollar in the immediate aftermath of the rate cut before paring losses to trade at R11.7375 per dollar.

Picture: EWN

JOHANNESBURG - South Africa’s rand and banking stocks fell on Wednesday after the central bank lowered its main lending rate for the first time since July and said it thought the currency was overvalued.

Most economists had expected the 25 basis point cut in the repo rate to 6.5%, which dented the appeal of local assets versus developed-market peers, though a significant minority had predicted rates would stay on hold.

The rand traded as much as 1% weaker versus the dollar in the immediate aftermath of the rate cut before paring losses to trade at R11.7375 per dollar, around 0.5% weaker than its overnight close of R11.6800 at 1622 GMT.

Rand assets have been basking in investor optimism since it became clear late last year that President Cyril Ramaphosa would replace scandal-plagued Jacob Zuma as head of state.

Ramaphosa has promised to kick-start economic growth and root out corruption, messages which helped persuade Moody’s to keep the country’s last investment-grade credit rating intact last week.

The South African Reserve Bank’s message on Wednesday that the rand is now “somewhat overvalued” is one more sign that the recent rally is running out of steam.

Capital Economics said in a note that they expected the rand to weaken and that rates would remain on hold for the remainder of the year.

On the equities market, the All-share index fell 2.3% to 54,764, weighed down by banking stocks and bourse heavyweight Naspers, which dropped 6.33% to R293,193.

Ferdi Heynke, portfolio manager at Afrifocus securities, said Naspers was hurt by uncertainty over its recently announced sale of a portion of Chinese firm Tencent.

In fixed income, the yield on the benchmark government bond was up 1.5 basis points to 7.925%, reflecting weaker bond prices.

Comments

EWN welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

- Racism (including offensive comments based on ethnicity and nationality)
- Sexism
- Homophobia
- Religious intolerance
- Cyber bullying
- Hate speech
- Derogatory language
- Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the EWN community a safe and welcoming space for all.

EWN reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

EWN is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

comments powered by Disqus