Rand stronger after Ramaphosa announces lockdown easing

The South African rand began the week stronger on Monday after President Cyril Ramaphosa announced a sweeping removal of lockdown restrictions over the weekend.

Ramaphosa said that from midnight on Monday a ban on alcohol and tobacco sales would be lifted, inter-provincial travel would be allowed and restaurants and taverns could return to normal business subject to hygiene protocols.

By 0631 GMT the rand was trading at R17.34 versus the dollar, roughly 0.3% firmer than its previous close. Dollar weakness on global markets also supported the rand.

Government bonds were little changed in early trade, with the yield on the 2030 bond at 9.16%.

Africa’s most industrialised economy has been hit hard by one of the world’s strictest lockdowns, imposed in late March to curb the spread of the coronavirus, but Ramaphosa said the indications were that the country had reached the peak of Covid-19 infections.

Official forecasts are for gross domestic product to contract by at least 7% this year, with South Africa having recorded the fifth-highest number of COVID-19 infections worldwide.