Rand at two-week high after data revised
THE rand recovered to two week highs against the dollar yesterday, lifted by a revision of trade data which reveals a much narrower deficit than previously stated.
However, market relief could be fleeting as the country relies heavily on capital flows which are prone to volatility, to plug the gap.
The rand pushed to 10.1205 versus the greenback earlier yesterday, its strongest since November 4, but came back to trade at 10.1775, up 0.2 percent from Thursday’s close.
Government bonds were also firmer, with the yield for the paper in 2026 sliding 12 basis points on the day to 8.095 percent.
The yield for the bond due in 2015 at the shorter end of the curve fell by the same margin to 6.03 percent.
The rand was trading around 10.3500/dollar late on Thursday before the national revenue service said it had cut South Africa’s 2012 trade deficit to about a third of the previously stated shortfall after incorporating previously excluded trade with its neighbours.
It halved the cumulative shortfall for the year to September to about R64 billion, a move which should reduce the current account gap for the country, which at around 6 percent of GDP remains a weak spot for the rand. – Reuters