South Africa's rand slightly weaker

South Africa's rand slipped against the dollar on Monday as markets bet a relatively healthy US economy will lead the Federal Reserve to raise rates in the middle of this year. The rand slipped to 11.7100 at 1452 GMT, little changed against the greenback from last night's New York close of 11.7105, but it remains vulnerable to steeper losses given the dollar's dramatic rise to 9-year highs against the euro.
The South African Reserve Bank raised its repo rate 75 basis points last year to 5.75 percent and economists expect more hikes in the third quarter of this year to keep up with expected increases in the United States. On the fixed income front, bonds put in surprising gains, with analysts saying that a sharp sell-off in local equities may mean some investors are repositioning to debt. South Africa's Top-40 index booked its biggest daily fall in over six years as investors world-wide dumped emerging market assets. "If you are selling South Africans stocks you might just be buying the bonds at the moment as a safe haven," said Christie Viljoen, senior economist at NKC Independent Economists.