South Africa's rand posts modest gain, stocks ease

 21 Dec 2015 - 10:24

South Africa's rand posts modest gain, stocks ease

JOHANNESBURG: South Africa's rand rose slightly on Monday, with subdued trade ahead of the holidays calming markets after the previous week's volatility driven by an interest rate hike in the United States and domestic political turbulence.

By 0707 GMT the rand had firmed 0.10 percent to 15.0750 per dollar, taking advantage as the greenback drifted lower.

The dollar, measured against a basket of major currencies, was a shade weaker in early trade.

Analysts said, however, the rand would continue to be vulnerable to fundamental economic weakness going into the new year, exacerbated by an expected stronger dollar.

"Failure to address the country's economic woes will keep the South African currency under severe pressure going into the new year," analysts at NKC African Economics wrote in a note.

Rand weakness has been relentless in 2015. 

After opening the year at 11.55, it weakened more than 30 percent under pressure from a strong dollar, the global commodities rout, weaker growth in China, a U.S. rate hike and domestic economic woes.

On the equities market, stocks opened slightly weaker. By 0710 GMT the Johannesburg Securities Exchange's Top-40 index was 0.1 percent lower at 43,933 points after losing 2.11 percent in the previous session.

The broader all-share index also fell 0.1 percent to 48,655 points, having dropped nearly two percent on Friday.

Government bonds were mixed, with the yield on benchmark issue due in 2026 shedding 0.5 basis points to 9.35 percent.

Reuters