South Africa’s rand steadied against the dollar in early trade on Monday, holding near a three-year high touched on Friday after President Cyril Ramaphosa said tough decisions would be made to repair the economy after years of stagnation. South African bank notes featuring an image of former South African President Nelson
At 0645 GMT, the rand traded at 11.6600 per dollar, not far off its close of 11.6375 on Friday.
The currency raced to a three-year high of 11.5600/dollar on Friday after Ramaphosa said his government was committed to “policy certainty and consistency” and that tough decisions would be taken to close the fiscal gap and stabilise debt. [nL8N1Q64UL]
“Despite the markets appearing to receive the (state of the nation address) well, there remains much to be done to rescue the local economy and this will undoubtedly take time after nearly ten years of mismanagement and corruption,” Nedbank analysts said in a note.
Ramaphosa was sworn in as head of state on Thursday after his scandal-plagued predecessor, Jacob Zuma, reluctantly resigned on orders of the ruling African National Congress after nine years in office blighted by corruption allegations and economic mismanagement. [nL8N1Q51P4]
Market focus this week will be on Finance Minister Malusi Gigaba’s budget speech on Wednesday.
In fixed income, the yield on the benchmark government bond due in 2026 was down 3 basis points to 8.08 percent, reflecting stronger bond prices.
Reporting by Olivia Kumwenda-Mtambo; Editing by Biju Dwarakanath (Reuters)