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South African rand regains some ground against the dollar

South Africa’s rand firmed on Monday, recovering from an all-time low hit against the dollar last week as investors were spooked by possible sanctions amid U.S. allegations, rejected by Pretoria, that South Africa had shipped arms to Russia.

At 1543 GMT, the rand traded at 19.0325 against the dollar , 1.54% stronger than its previous close.

The currency – already under pressure over the worst power cuts on record – was pummelled last week by investor concerns over a U.S. allegation that a Russian ship had picked up weapons in South Africa in December.

It hit 19.51 to the dollar at one point on Friday, its weakest level ever.

South African officials swiftly rejected the U.S. claims and said the country had not approved any arms shipment to Russia in December.

Barclays’ analysts said in a note they did not expect the rand to attract significant capital inflows in the long term.

“Investors, it seems, simply do not see value in South African economy, and we do not think this situation will change until there is material progress towards resolving energy or fiscal issues,” Barclays said.

On the stock market, the Top-40 and the broader all-share index were both almost flat.

South Africa’s benchmark 2030 government bond was stronger in afternoon deals, with the yield down 19.5 basis points at 10.745%.

Source: here