SA rand firm

JOHANNESBURG. — South Africa’s rand firmed yesterday as the previous week’s rout over electricity blackouts eased, with some traders taking the slide to two-month lows as an opportunity to buy the currency cheap.

At 0630 GMT, the rand was 0.07 percent firmer at 14.0600 per dollar compared to Friday’s close of 14.0700 in New York.

Since the resumption of nation-wide power cuts by state power utility Eskom last Monday, the rand has lost close to 5 percent, breaching the crucial 14.00 psychological mark as the crisis at the state-owned power utility put a credit downgrade to junk back on the radar.

On Friday, Public Enterprises Minister Pravin Gordhan told Reuters that the government would ask independent power producers (IPPs) to lower the price Eskom pays for electricity from older renewable energy projects to plug the gaps in supply.

Eskom said on Friday the probability of power outages this week was low as the performance of its creaking fleet of coal-fired stations had improved.

A firming dollar, as Washington and Beijing looked close to sealing a trade agreement, has also put pressure on the currency ahead of the annual budget on Wednesday where the finance minister is expected to unveil a rescue package for Eskom.

Bonds were also firmer, with the yield on the benchmark paper due in 2026 down 2 basis points to 8,86 percent.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0,5 percent.