Rand weakens after World Bank cuts growth forecast

The rand retreated early on Thursday after the World Bank cut its economic growth forecast and took a dim view of President Cyril Ramaphosa’s stimulus plan.

The rand was 0.29% weaker at 14.68 per dollar at 0650 GMT, having closed in New York at 14.64.

The currency is expected to trade between 14.45 and 14.85 to the dollar on Thursday, NKC African Economics wrote in a note.

The World Bank on Wednesday cut South Africa’s economic growth forecast for 2018 to 1% from an earlier forecast of 1.4%.

Investors remain skittish on the rand following the announcement on September 21 of a stimulus programme that will see a reallocation of the budget but does not involve an injection of new cash.

In fixed income, the yield on the benchmark government bond due in 2026 flat at 9.090%.

Stocks are due open weaker at 0700 GMT, with the JSE securities exchange’s Top 40 Futures index down 1.26%. 

Source: moneyweb.co.za