South Africa's rand rallied against the dollar on Thursday and bond yields fell after the central bank cut its main lending rate by 25 basis points in a widely expected move to counter floundering economic growth. At 1600 GMT, the rand was 0.93% higher at 13.8825 per dollar after closing at 14.0125 in previous session.
Bonds also crossed a crucial psychological mark, with the yield on benchmark 2026 government bonds dipping below 8% to 7.975%, 5 basis points lower on the day. Stocks closed higher, with miners, retailers and financial firms, all of which benefit from the interest rate decision or its effect on the rand, topping the Johannesburg Stock Exchange's blue-chip index.
The JSE Top-40 index rose 0.33% to 51,733 points and the broader all-share index closed 0.37% higher at 57,847 points. The South African Reserve Bank (SARB) cut rates by 25 basis points to 6.5% in a unanimous decision, its first easing since March 2018, although it struck a cautious tone suggesting future reductions to borrowing costs were not a foregone conclusion despite benign inflation.
Comments
Comments are closed.