JOHANNESBURG: South Africa's rand was softer against the dollar on Tuesday, in nervous trade ahead of a Moody's rating review visit and the central bank's interest rate decision later in the week.
Stocks opened lower, with the JSE securities exchange's Top-40 index dipping 0.7 percent.
At 0700 GMT the rand was down 0.35 percent at 15.5950 to the dollar compared with where it closed in New York on Monday.
This followed a drop of nearly 2 percent on Monday, after Finance Minister Pravin Gordhan said it would be hard for South Africa to get its credit rating back up, should it be downgraded.
Moody's, Standard & Poor's and Fitch have all warned of possible downgrades after President Jacob Zuma changed finance ministers twice within a week in December, casting doubt on Pretoria's commitment to fiscal prudence.
Moody's will start a three-day visit on Wednesday to review South Africa's rating.
Tuesday's rand weakness was also in line with softer emerging markets after the Bank of Japan held policy steady as expected, boosting the yen which is seen as a safe haven currency.
"We expect international developments ... to hold more sway over the rand than local developments leading up to the MPC meeting on Thursday," Standard Bank said in a note, referring to the South African Reserve Bank monetary policy committee's own rate announcement.
Economists polled by Reuters say the MPC will wait until May before hiking interest rates again, despite rising inflation, as economic growth stutters.
On the bond market, government debt prices edged lower, and the yield for the benchmark instrument due in 2026 was up 3 basis points at 9.17 percent.
Comments
Comments are closed.