RAND UP ON MOODY’S SIGNAL

THE RAND strengthened against the dollar on Friday, putting it on track to end a week marked by the annual budget higher, after Moody’s signalled the nation’s spending plans did not weaken its policy credibility.

The rand rose 0.37 percent to R13.9675 to the dollar by 6.07pm on Friday compared with the previous day’s close of R14.02 in New York and the week’s low of R14.37 on the day of the budget.

On Thursday, Moody’s, the last of the big three ratings agencies to maintain an investment grade on South Africa, said that the government’s decision to raise its spending ceiling by R16 billion did not weaken fiscal policy credibility.

Attention had turned to rating agencies’ reaction to the budget, which included a bleaker outlook for economic growth and debt and a bailout for struggling state-run power firm Eskom, after concern it could prompt a downgrade.

Government bonds firmed, with the yield on benchmark 2026 paper easing 1 basis points to 8.715 percent.

Stocks rose, with Truworths International among the big gainers after management presented a detailed halfyear results. The firm topped the Top40 index, rising 5.44 percent to R76.02.

The all share index rose 0.92 percent to 55 992.97 points, while the Top40 index climbed 1.08 percent to 49 735.59 points. I Reuters