The rand firmed against a weaker dollar on Monday, as risk sentiment improved on increasing hopes of the US Federal Reserve slowing the pace of its interest rate hikes.
At 10:33, the rand traded at R17.01 against the dollar.
ETM Analytics attributed the rand’s recovery to last week’s strong US labour market data and investors taking a more measured view of indications that the government may try to change the South African Reserve Bank’s (SARB) mandate.
“The recovery was driven mainly by the retreat in the trade-weighted dollar that unwound all of last week’s gains but also because talk of changing the Sarb’s mandate is not necessarily something to fear,” ETM said in a note.
Gwede Mantashe, chairman of the governing African National Congress (ANC), said on Friday that it wanted to expand the Sarb’s mandate to do more to support the economy, prompting the rand to fall during the session.
The central bank’s primary focus, as spelled out in the constitution, is currently “to protect the value of the currency in the interest of balanced and sustainable economic growth”.
On the stock market, the blue-chip index of top 40 companies hit a historical high, while the broader all-share index touched a 10-month high in early trade.
The government’s benchmark 2030 bond was stronger in early deals, with the yield down 9.5 basis points to 9.905%.