JOHANNESBURG – Rand regained some ground against the dollar early on Tuesday having dipped to a three-week low overnight as continued demand for high-yielding currencies globally helped it shrug off concerns about the central bank’s independence.
At 0700 GMT, the rand traded at 12.9550 per dollar, 0.3 percent firmer compared with its New York close of 12.9925 on Monday.
The rand tumbled nearly 2 percent to a low of 13.0525, its weakest since June 1, after an anti-graft government agency on Monday recommended constitutional changes to make the central bank abandon its policy of currency and price stability.
Traders and analysts warned that the move could further dampen confidence in South Africa following credit downgrades to junk and two consecutive quarterly growth contractions.
The South Africa central bank hit back against Public Protector on Tuesday, saying it would take urgent legal action against the recommendation.
Stocks opened lower at 0700 GMT, with the JSE securities exchange’s Top 40 down 0.17 percent.
In fixed income, the yield for the benchmark government bond due in 2026 rose half a basis point to 8.55 percent.