Rand stretches gains, bonds firmer
THE RAND extended gains against the dollar yesterday and government bonds firmed, helped by slowing inflation and the government’s rejection of nationalisation of mines and banks.
At 5pm, the rand had gained 0.79 percent to R13.1715 to the dollar, its firmest since March 31, compared to a close of R13.2775 overnight in New York.
In fixed income, the yield for the benchmark government bond due in 2026 fell.
“The investment community’s view is that inflation is falling sharper than what the Reserve Bank currently anticipates and the country’s real rate story later this year is going to look a lot more compelling than what it does at the moment, therefore the support for government bonds remains,” said BNP Paribas Cadiz Securities analyst, Jeffrey Schultz. SOYA BEANS for delivery in July gained 0.4 percent to $9.64 a bushel (R4 709 a ton) on the Chicago Board of Trade yesterday afternoon.
China’s decision to cut value added tax for some agricultural goods from July 1 “expected to support soya bean imports”, CRM Agri-Commodities, a consultant in Newmarket, England, said in a report.
Maize for July rose 0.5 percent to $3.70 a bushel, while wheat was up 0.4 percent at $4.36 a bushel. – Bloomberg