UPDATE 1-South African rand firmer after central bank holds rates

  • Reuters
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UPDATE 1-South African rand firmer after central bank holds rates
Credit: © Reuters.

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JOHANNESBURG, Sept 17 (Reuters) - South Africa's rand extended its recent rally to a new six-month peak on Thursday after the central bank kept lending rates unchanged.

At 1420 GMT the rand ZAR=D3 was 0.32% firmer at 16.2225 per dollar, having touched a session high of 16.1800 soon after the monetary policy decision.

The rand is now at back to levels seen in late March, before the imposition of a COVID-19 lockdown.

An overnight dollar rally spurred by the U.S. Federal Reserve's upbeat economic outlook and decision to hold interest rates faded during the session, boosted the rand further. South African Reserve Bank (SARB) left its main lending rate unchanged at 3.50%, Governor Lesetja Kganyago announced on Thursday. reactive nature is encouraging for the SA economy. This bodes well for the rand through Q4 and 2021," said one trader at IG Group Warren Venketas.

"Coupled with an increase in global risk appetite and possible vaccine hopes, I believe there'll be a steady appreciation of the rand. We should see the 16.0000 handle come into focus toward the end of 2020."

Sentiment was also lifted by President Cyril Ramaphosa's decision late on Wednesday to change the country's lockdown to the lowest alert level and open international borders. also ended firmer, with the yield on the benchmark 2030 issue ZAR2030= down 5.5 bps to 9.180%.

Stocks, however, fell, with the Johannesburg Stock Exchange's Top-40 Index .JTOPI dropping 1.8% to 50,700 points and the broader All-Share Index down 1.65% to 55,036 points.

Gold and platinum miners dragged the blue-chip index lower as the Fed's guidance around further stimulus disappointed, hitting gold prices. Fields GFIJ.J and AngloGold Ashanti ANGJ.J both fell more than 6%, followed closely by Impala Platinum Holdings IMPJ.J and Anglo American (LON: AAL ) Platinum AMSJ.J , down 5.7% and 4.6% respectively. Sibanye Stillwater SSWJ.J and Northam Platinum NHMJ.J fell 4.6% and 4.2%.

The biggest gainer was retailer Woolworths (ASX: WOW ) WHLJ.J , which rose 6.6% after announcing it was reviewing its South African clothing business and the food division of its Australian unit to stem losses.

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