UPDATE 1-South Africa's rand and stocks firm ahead of Ramaphosa speech

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand and stocks firm ahead of Ramaphosa speech
Credit: © Reuters.

(Adds details, stocks)

JOHANNESBURG, March 30 (Reuters) - South Africa's rand and stocks firmed in late trade on Tuesday, ahead of President Cyril Ramaphosa's address to the nation on the country's response to the COVID-19 pandemic.

At 1505 GMT the rand ZAR=D3 was 0.23% firmer at 14.8950 per dollar.

The currency had a volatile session that saw it weaken to a session low of 14.9950 before recovering, as investors continue to look to moves in global markets for direction.

High-yielding currencies in the developing world have come under pressure this month from rising U.S. bond yields, which have surged on expectations of higher inflation and pushed up demand for the dollar.

Ramaphosa was due to address the nation at 1730 GMT.

South Africa is the hardest-hit country on the continent in terms of recorded coronavirus cases and deaths, while its vaccination programme has so far lagged wealthier nations.

The slow vaccine rollout has raised concerns of tighter lockdown restrictions should infections rise rapidly again.

"South Africa's slow economic recovery continues to depend on the degree of lockdown restrictions imposed, with businesses, and economic activity, proving highly sensitive to the restrictions," said Investec chief economist Annabel Bishop.

Stocks also firmed, with the Johannesburg All-Share index .JALSH up 0.3% to 67,291 points while the Top-40 index .JTOPI climbed 0.24% to 61,589 points.

Among the strong sectors on the bourse were real estate firms, with the South Africa listed property index .JSAPY up 1.49%.

Consumer discretionary and staples stocks also gained after central bank data showed that personal disposable income grew 3.7% quarter-on-quarter in the fourth quarter and household consumption spending remained firm, but the growth rate decelerated to 7.5% q-o-q from a 75.3% surge in the third quarter as spending normalised.

"Economic activity will fare better in 2021 as the gradual rollout of COVID-19 vaccines ease anxiety. However, household finances will probably remain under pressure," Nedbank's Senior Economist Nicky Weimar and economist Johannes Khosa said in a note.

Bonds weakened, with the yield on the benchmark 2030 paper ZAR2030= up 10 basis points to 9.55%.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or