Views Article – Sharenet Wealth

Africa, Forex

South African rand firms as holds rates; stocks edge up

(Updates after rate decision)

JOHANNESBURG, Jan 21 (Reuters) – South Africa’s rand firmed on Thursday, supported by the central bank’s decision to leave interest rates unchanged and expectations that the new U.S. administration will unveil a massive stimulus package.

At 1600 GMT, the rand traded at 14.8250 versus the dollar, 0.5% stronger on the day.

The South African Reserve Bank kept the repo rate at 3.5% in a close decision.

Three out of five members of the monetary policy committee wanted to hold the rate while two preferred a rate cut that could have dented the appeal of investing in rand assets.

Republicans in the U.S. Congress have indicated they are willing to work with President Joe Biden on one of his administration’s priorities, a $1.9 trillion stimulus plan, boosting the market mood globally.

The Johannesburg Stock Exchange recorded small gains, with concerns over the country’s coronavirus vaccine rollout plans counteracting buoyant offshore sentiment.

The All-share index gained 0.1% to end the day at 64,175 points, while the Top-40 index closed up 0.19% at 58,969 points.

The gold mining index was up 1.92% and the platinum index up 2.75% at market close.

In fixed income, the yield on the 2030 government bond was up 0.5 basis points at 8.725%.

(Reporting by Promit Mukherjee, Alexander Winning and Olivia Kumwenda-Mtambo; Editing by Kirsten Donovan)

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