SA rand weakens

JOHANNESBURG. — The rand was weaker against the dollar yesterday morning ahead of the state of the nation address tomorrow.

The local currency has been relatively stable in the weak leading to the address and amid speculation that President Jacob Zuma may reshuffle the Cabinet.

The rand has maintained its resilience in the face of political uncertainty in the US, along with upbeat jobs data, not weakening beyond 13,68 to the US dollar.

The South African Reserve Bank reported that SA’s gross foreign reserves decreased by $690 million to $46,7 billion in January. Foreign reserves are watched closely by rating agencies as they are an indicator of a country’s ability to repay foreign debt in the short term while also being used to defend the currency.

Rating agencies will be paying attention when an agreement on an hourly minimum wage proposal is announced later in the day. Standard Bank’s Warrick Butler said this was one of the structural changes that investors and agencies would watch with interest. The South African Chamber of Commerce and Industry (Sacci) releases business confidence index data for January later in the day.

Nedbank analysts said confidence in January could have deteriorated due to political uncertainty, however, a stable rand could cap the downside.

At 9am the rand was at 13,3913 to the dollar from Monday’s 13,3003. It was at 14,3208 against the euro from 14,2950 and 16,6691 to the pound from 16,5874. The euro was at $1,0695 from $1,10750.