Rand shrugs off downgrade as high yield draws investors
At 0650 GMT, the rand traded 0.62 percent firmer at 12.8675 per dollar compared to close of 12.9475 on Friday in New York.
Rands. File photo.
South Africa’s rand traded firmer on Monday, shrugging off a credit downgrade of both local and foreign currency ratings as investors kept faith in the high yield on offer.
* At 0650 GMT, the rand traded 0.62 percent firmer at 12.8675 per dollar compared to close of 12.9475 on Friday in New York.
* Moody’s on Friday lowered South Africa’s rating by a single notch from Baa2 to Baa3, the bottom of the investment grade table with a negative outlook, citing a recent abrupt cabinet reshuffle and reduced growth prospects.
* Uncertainty in developed market currencies following last week’s U.K. election, upcoming Federal Reserve interest rates decision, aided inflows into emerging markets.
* Bonds also firmer, with yield on benchmark 2026 government bond down 1 basis point to 8.48 percent.
* Stocks set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.66 percent.
