South African rand holds near 5-wk high; stocks set to open lower

Nov 28, 2017

South Africa’s rand steadied against the dollar early on Tuesday, holding near a five-week high touched in the previous session after the country avoided a double downgrade of its local currency debt.

At 0640 GMT, the rand traded at 13.7600 per dollar, unchanged from its New York close on Monday.

The currency hit a five-week high of 13.6750 on Monday, taking relief from Moody’s decision to only place South Africa on review for downgrade, while S&P Global Ratings downgraded the sovereign deeper into “junk” territory.

News that the government plans to reduce the fiscal deficit through expenditure cuts and higher taxes also helped the currency.

In fixed income, the yield for the benchmark government bond due in 2026 was down 2 basis points to 9.22 percent.

Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.5 percent.

Reporting by Olivia Kumwenda-Mtambo; Editing by Vyas Mohan  (Reuters)

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