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#RandReport: Rand falls further before key economic data

At 1520 GMT, the rand traded at 13.2400 per dollar, around 0.7% weaker than its close on Monday.

Picture: EWN.

JOHANNESBURG - The rand fell for a fourth successive day on Tuesday, trading near a six-month low before retail sales and mining data later in the week.

At 1520 GMT, the rand traded at 13.2400 per dollar, around 0.7% weaker than its close on Monday.

South African assets have been hurt by disappointing gross domestic product data and an unfavourable external backdrop which has seen global investors pull back from emerging markets.

Rising US bond yields and the increasing likelihood that the South African Reserve Bank (SARB) will raise its main lending rate in the coming months have also hurt the rand by dampening appetite for local bonds.

The yield on the benchmark 2026 government bond hit its highest since mid-December on Tuesday, reflecting weaker bond prices.

“Rand weakness is partly a bond story,” said Halen Bothma at ETM Analytics. “Bonds tend to perform worse in a rate-hiking cycle which is where the SARB looks headed”.

For now, few local banks are adjusting their rand forecasts downwards and officials are urging calm.

South African President Cyril Ramaphosa has promised ambitious economic reforms which should buttress the growth outlook later in the year, rekindling investor appetite for rand assets.

After a 2.2% contraction in the first-quarter GDP, retail sales and mining figures on Wednesday and Thursday will give a clue as to how the economy fared in the second quarter.

Stocks listed in Johannesburg ended Tuesday slightly stronger.

The Top-40 index closed 0.1% higher at 51,909 points, and the broader All-share index climbed 0.1% to 58,207 points.

Miner Sibanye-Stillwater’s shares were an exception, falling 3.8% after the firm said four employees were killed at one of its mines.

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