Rand extends relief rally as Trump talks down the dollar

In contrast, the yield on SA’s benchmark R186 bond stood at 8.995%, making it an attractive proposition for yield-hungry investors. Foreigners sold just more than R10bn worth of local bonds over the past week, contributing to the recent sharp drop in the value of the rand and the spike in local bond yields.

Foreigners hold the biggest share of the local debt at about 41%, rendering SA vulnerable to capital flight when global sentiment sours.

While the rand was caught up with the Turkish lira’s contagion, analysts say local factors have contributed to the poor sentiment around local assets. The concerns include the controversial land reform debate and the recent round of disappointing economic data, which led to a concern that SA might have tipped into a technical recession in the second quarter.

At 10.52am, the rand was at R14.3726 to the dollar, from R14.5261. It was at R16.5712 to the euro from R16.6801, and at R18.4324 to the pound from R18.5851.