Rand firms by 1%, still in 'treacherous terrain'

The rand strengthened by 1% against the greenback in early trade on Thursday, one of the first signs of good news in what has been a tumultuous week for the local currency. 

The rand opened at R15.42/$, and after initially weakening, firmed by 1% to change hands at R15.27 to the greenback by 11:11.

Bianca Botes of Peregrine Treasury Solutions said in a morning note that, while it had strengthened somewhat, the rand would continue to 'trade in treacherous terrain' given the twin pressures of SA's technical recession and broad emerging market weakness. 

"While the rand has been the victim of emerging market spillover, the local economy has failed to produce any meaningful economic growth, with policy uncertainty and high fiscal spending tainting the country's leadership," she said.  

"Stagnation as well as a downgrade are now two very real threats." 

The local currency has lost 33% of its value from its best level of just under R11.50/$ in late February, in the wake of the 2018 Budget and President Cyril Ramaphosa's maiden State of the Nation Address.

The dollar index - which tracks the dollar's relative strength against a basket of currencies - was at 95.10 at 11:12 on Thursday, stable for the day.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

ZAR/USD
17.63
(-0.04)
ZAR/GBP
23.01
(-0.05)
ZAR/EUR
20.79
(-0.01)
ZAR/AUD
12.62
(-0.03)
ZAR/JPY
0.17
(-0.01)
Gold
2034.21
(+0.05)
Silver
28.28
(+0.09)
Platinum
961.50
(+0.38)
Brent Crude
44.55
(-1.53)
Palladium
2166.01
(+0.63)
All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 932 votes
It depends on how the funds are used.
74% - 6248 votes
No. We should have gotten the loan elsewhere.
15% - 1285 votes
Vote