Rand regains lost ground against dollar but remains fragile

“Our level of inflation is about a third of Turkey’s and at the moment our president does not tell the Reserve Bank what to do,” said Umkhulu analyst Adam Phillips.

He said there was scope for the rand to gain further from the two-year low of R15.02 last week. “But we could also see another steep weakening move in nervous trade,” he said.

The rand came under pressure last week amid renewed concern over the local political and economic situation, which saw local bonds being sold off by more than a net R10bn. Local equities experienced a net outflow of R2bn.

The concerns include the controversial land reform debate and the recent round of disappointing economic data, which led to worries that SA might have tipped into a technical recession in the second quarter.

At 2.58am the rand was at R14.5667 to the dollar from R14.6952, at R16.6425 to the euro from R16.7938 and at R18.5902 to the pound from R18.7208.

The euro was at $1.1425 from $1.1439. It reached a worst level of $1.1301 last week.

Local bonds were slightly firmer ahead of the release of consumer inflation data for July, due on Wednesday. The consumer price index (CPI) is expected to have risen to 4.9% year on year, or even higher, from 4.6% in June.

The R186 was bid at 9% from 9.04%.

The US 10-year treasury was last seen at 2.8388% from 2.8587%.