JOHANNESBURG – South Africa’s rand climbed to a one-week high on Wednesday, supported by a weaker dollar and encouraged by comments from the new finance minister indicating no significant change in policy.
Finance Minister Malusi Gigaba has sought to reassure investors since Pravin Gordhan was sacked last month during a political crisis that has hit the currency and led to downgrades by ratings agencies.
By 1500 GMT, the rand had gained 1.3 percent to 13.6450 against the dollar, its strongest level since April 5. During Monday’s trading, the rand had slid to its lowest level since December but has steadily climbed since then.
Treasury One’s chief currency dealer Wichard Cilliers said the rand was helped by weakness in the dollar, which has been under pressure since a U.S. missile strike on Syria and tension between Washington and North Korea.
“The rand was also supported by comments from new finance minister Malusi Gigaba that were better than expected. He basically said very little will change,” he said.
Government bonds tracked the firmer currency, with the yield on the benchmark paper due in 2026 cutting 10 basis points to 8.855 percent.
On the bourse, the benchmark Top-40 index was down 0.02 percent at 46,747 points, while the All-share index gained 0.03 percent to 53,551 points.
Diversified resource firms weighed on the bourse as the copper price slid to a 1-month low on geopolitical tensions and as hopes of an infrastructure-fuelled boost to U.S. demand fade.
Anglo American was down 5 percent at 199.52 rand, but banks gained from the uptick in sentiment, with the banking index advancing 3 percent to 7,164 points.
Barclays Africa Group lagged other lenders, gaining 1.4 percent to 144.97 rand as South Africa’s political upheaval makes it tougher for parent Barclays to sell down its stake.