UPDATE 1-South Africa's rand rides local exporter support despite debt concerns

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand rides local exporter support despite debt concerns

(Adds latest prices, analyst figures)

JOHANNESBURG, Jan 28 (Reuters) - The rand firmed on Thursday, buoyed by exporters who helped shield it from souring sentiment toward risk currencies amid fears over global coronavirus cases and concerns over South Africa's debt.

At 1545 GMT the rand ZAR=D3 was 0.85% firmer at 15.1450 per dollar compared to an open of 15.2650.

"The rand is still within this 15.05 to 15.38 range despite the risk aversion currently taking place. A testament to the local exporter supply," Standard Bank (JO: SBKJ ) chief trader Warrick Butler said in a note.

"High real rates are a boon still. However, given that SA has one of the highest debt serving costs globally, one has to wonder just how long the rand can maintain its heady heights."

The International Monetary Fund (IMF) warned South Africa on Wednesday about its spiralling debt, stressing the urgency of fiscal consolidation. & Poor's EMEA sovereign analyst Frank Gill said the debt levels were a concern. "We don't think South Africa will be able to stabilise their debt any time soon," he said.

Bonds inched firmer, with the yield on the ZAR2030= down 0.5 basis point to 8.765%.

Stocks rose, with the Johannesburg Stock Exchange's Top-40 Index .JTOPI rup 0.76% to 58,084 points and the broader All-Share Index .JALSH climbing 0.67% to 63,207 points.

Miners led the charge, with Sibanye-Stillwater SSWJ.J , Anglo American Platinum AMSJ.J and its parent Anglo American AAL.L , which reported a rebound in production, as well as Gold Fields GFIJ.J and a host of peers topping the blue-chip index.

The stocks closed up 6%, 5.48% and 3.25% respectively, despite a slip in the gold price throughout the day as safe-haven appeal shifted to the dollar, although both gold and silver were rising before the local market closed. the worst performers were retailers including Shoprite SHPJ.J , which closed down 3.27%.

Share prices across the sector have been elevated in recent days after trading statements indicated it was bouncing back from the hefty blow dealt by the coronavirus pandemic.

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