Cape Town – Contrary to the earlier predictions that the rand will result to further loses on Monday. The rand is getting stronger against the dollar, this happened on Monday morning.
In the early afternoon the trade rand was already stronger by 2.02% which is R13.75 to the dollar. By gap, the currency weakened by about 30 cents to the dollar on Friday.
TreasuryOne dealer Phillip Pearce said in a statement despite the country’s downgrade the demand for local bonds has attracted more people.
Pearce also went on to say that, “Investors have decided that the return on offer outweighs the risks highlighted. The portfolio inflows have bolstered the rand as it is apparent global markets are yield hungry in an environment of persistently low interest rates in the face of lackluster inflation.”
Bianca Botes of Peregrine Treasury Solutions told Media24 that with the ANC election conference just around the corner, the country’s landscape is shifting to a more “investment friendly” one.
“While the rand firmed by over 1.7%, we do believe that there is still tremendous risk in an environment that generates very little economic growth, while being subjected to massive potential outflows,” said Botes.