Rand weaker on Moody’s warn­ing

The Star Early Edition - - PRICES - Reuters

THE RAND ex­tended its losses against the dol­lar yes­ter­day after a warn­ing by Moody’s about po­lit­i­cal in­ter­fer­ence in the coun­try’s eco­nomic pol­icy reignited fears about down­grades of credit rat­ings.

At 5pm, the rand traded at R13.2560 to the dol­lar, 0.53 per­cent weaker than its New York close on Mon­day. The unit fell to R13.31 ear­lier in the ses­sion, a near three­week low.

Moody’s said on Mon­day that, while a rate cut on July 20 by the cen­tral bank would sup­port growth, there was grow­ing po­lit­i­cal pres­sure on eco­nomic pol­icy.

Cen­tral Bank gov­er­nor Le­setja Kganyago said after the rate cut that the cen­tral bank re­mained in­de­pen­dent and had not come un­der any pres­sure to re­duce rates.

Pub­lic Pro­tec­tor Bu­sisiwe Mkhwe­bane, whose job is to en­sure proper con­duct in pub­lic of­fice, sparked a po­lit­i­cal row when she pro­posed in June that the cen­tral bank’s mone­tary pol­icy man­date be changed to fo­cus on eco­nomic growth.

Kganyago filed a court chal­lenge to quash the rec­om­men­da­tion, de­scrib­ing the pro­posal as reck­less. The hear­ing for the case started in Jo­han­nes­burg on Tues­day, and a rul­ing is ex­pected by Au­gust 18.

Mean­while, stocks posted mod­est gains as rand-hedged com­pa­nies lifted the bourse.

The bench­mark JSE Top40 in­dex was up 0.34 per­cent to 49 038.68 points, while the all share in­dex ended 0.33 per­cent higher at 55 390.07 points. Rand hedges lifted the bourse.

Richemont, which has risen more than 23 per­cent this year, was up 1.07 per­cent to R113.35. Bri­tish Amer­i­can To­bacco was up 2.03 per­cent to R842.01.

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