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South Africa's rand slips ahead of rates decision, ratings reviews

11/19/2020 | 03:01am EST
New South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg

JOHANNESBURG (Reuters) - South Africa's rand weakened early on Thursday, extending a recent retreat to a third straight session as global demand for risk currencies wavered and investors looked ahead to local lending rates decision.

At 0700 GMT the rand was 0.5% weaker at 15.5350 per dollar, it softest level since Friday, and a touch above the 15.50 technical level that could trigger more selling.

Poor local economic data, with retail sales data for September recording another monthly contraction, and a return for demand for safe-haven currencies like the dollar in recent sessions, ended the rand's run to an eight-month high as risk clouds gathered.

Following this afternoon's rates decision, where the Reserve Bank is expected to keep rates steady at 3.5%, come credit ratings reviews by Moody's and S&P on Friday.

Both firms already rate the country's debt at subinvestment, but S&P has the country on a stable outlook.

Moody's and Fitch already have South Africa on negative outlooks. Should S&P bypass an outlook change and move straight to a downgrade, the rand could suffer some steep losses, analysts said.

(Reporting by Mfuneko Toyana; Editing by Toby Chopra)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
DOW JONES AFRICA TITANS 50 INDEX 0.35% 543.37 Delayed Quote.2.30%
DOW JONES SOUTH AFRICA(ZAR) -0.48% 1875.3 Delayed Quote.6.33%
EURO / SOUTH AFRICAN RAND (EUR/ZAR) 1.32% 18.4206 Delayed Quote.1.53%
S&P AFRICA 40 INDEX -0.48% 176.06 Delayed Quote.2.26%
US DOLLAR / SOUTH AFRICAN RAND (USD/ZAR) 1.16% 15.1336 Delayed Quote.2.09%
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