JOHANNESBURG: South Africa's rand rose to its firmest in just over a month on Wednesday while government bonds also strengthened after ratings agency Fitch affirmed the country's investment-grade credit status.
Fitch also maintained its stable outlook, but warned that political tensions could still derail efforts to boost growth.
By 1139 GMT the rand had gained 1.16 percent to 14.7295 per dollar, its firmest since May 4. The rand has gained since Friday's decision by S&P's to maintain South Africa's investment grade BBB- rating.
"The downgrade risk into junk has certainly not gone away and investors will still be cautious about getting into South African assets too quickly," said BNP Paribas Cadiz Securities economist Jeffrey Schultz.
GDP data showing the economy had contracted more than expected in the first quarter of the year had earlier weakened the rand, before gaining on Fitch's decision.
Bonds were firmer, with the yield on debt maturing in 2026 was down 6 basis points to 9.04 percent.
The benchmark Top-40 index fell 0.63 percent to 47,739 while the wider All-share index was 0.62 percent lower at 53,971, as it followed European stocks lower on mixed data out of China.
Comments
Comments are closed.