Thursday, 16 July 2015 14:48
JOHANNESBURG: South Africa’s rand extended losses against the dollar on Thursday, having fallen as much as one percent in the previous session after U.S. Federal Reserve chair Janet Yellen said a rate rise in 2015 remained likely.
By 0600 GMT the rand, along with other emerging market currencies, had weakened 0.2 percent to 12.4440 per dollar , after a close of 12.4190 in New York. The dollar index was up 0.2 percent in early trade.
Risk sentiment eased after Greece’s parliament passed austerity measures demanded by lenders for a new bailout and to keep the country inside the euro zone currency bloc.
South African government bonds were firmer, with the yield on the benchmark issue maturing in 2026 down 4 basis points to 8.125 percent.
With no local data due, attention turned to next week’s interest rate decision by the South African Reserve Bank (SARB), which has kept lending rates unchanged since July 2014, but looks likely to lift them as the economy continues to struggle.
“The SARB will be mindful of the current stagflation dilemma, but will likely hike local interest rates should the Fed initiate a hike at the September policy meeting,” Nedbank analysts said in a note to clients.
