Rand softer on news of likely interest rate freeze

THE RAND retreated against the dollar after the central bank hinted it might not raise rates further, while firms that earn profits outside the country helped lift stocks.

The rand was down 0.35 percent at 13.6700 by 1628 GMT, compared with Thursday’s close at 13.6225.

Government bonds also pulled back, with the yield on 10-year debt adding 3 basis points to 8.565 percent.

The rand has gained more than 13 percent against the dollar so far this year, buoyed like other emerging market assets by investors’ search for yield in the face of near-zero rates in developed economies.

But the Reserve Bank signalled on Thursday it might halt its interest rate hiking cycle, which started in early 2014 and has seen the repo rate rise 200 basis points.

The softer rand lifted the share prices of companies that have a large share of their revenues outside South Africa. Anglo American rallied to a 14-month high.

Shares closed 3.2 percent higher at R168.08. Mediclinic rose 2.7 percent to R169.80. The benchmark Top-40 index was 0.29 percent firmer at 45 440 points while the AllShare index was up 0.2 percent to 51 999 points. – Reuters