Rand gains before president’s speech on reopening economy

The rand gained against the dollar early on Thursday, before President Cyril Ramaphosa speaks later on the phased reopening of the economy.

At 0645 GMT, the rand traded at R18.90 per dollar, up 0.63% from its previous close.

Ramaphosa on Tuesday announced a R500 billion rescue package, equivalent to 10% of South Africa‘s gross domestic product, to cushion the economic blow of the COVID-19 pandemic.

He also said the government would adopt a phased approach to easing lockdown measures, which currently require people to remain in their homes and allow only essential services to operate.

“The rand is currently trading within a relatively limited range, with a generally weaker bias, as risk remains on the back foot,” Nedbank analysts said in a note.

“The nation will be looking to the president’s address for insights regarding the way forward.”

South Africa last month imposed some of the world’s strictest measures to contain the COVID-19 pandemic. The initial 21-day lockdown has already been extended by two weeks and is now due to expire on April 30. It is likely to drag the economy into a 6.1% contraction this year, the central bank forecasts.

In fixed income, and the yield on the 10-year government bond due in 2030 was up 0.5 basis points to 10.675%.