Rand weaker on Moody’s warning

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.