Make Kitco Your Homepage

Market News

South African rand inches up from record low after Thursday slump

Kitco News

JOHANNESBURG, May 26 (Reuters) - The South African rand made a marginal recovery early on Friday from a new record low struck overnight, after a central bank interest rate hike failed to impress some traders and economists.

At 0605 GMT, the rand traded at 19.7725 against the dollar , over 0.1% stronger than its previous closing level.

On Thursday the rand closed down more than 2.7% against the dollar, as some traders had bet on a larger 75 basis point rate hike than the 50 bps move the South African Reserve Bank (SARB) opted for.

Another factor cited behind the rand's surprise slump on Thursday were comments in the monetary policy statement that the SARB expected further currency weakness ahead.

The central bank has raised interest rates 10 consecutive times since November 2021. The latest hike takes its interest rate to a 14-year high, an effort to bring inflation back within its 3%-6% target band from 6.8% in April.

The rand struck a new all-time low of 19.8175 in the early hours of Friday morning. It is down about 1.6% against the dollar since the end of last week.

South Africa's benchmark 2030 government bond was little changed in early deals, the yield down 0.5 basis points to 11.160%.

Reporting by Tannur Anders Editing by Alexander Winning
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.