JOHANNESBURG. — South Africa’s rand recovered from three week lows yesterday, aided by improved risk sentiment after China cut rates for the fifth time in 2015 to ease pressure on its slowing economy. The Top-40 futures index was down 0,44 percent, suggesting the blue-chip stocks index would open 207 points softer at 0700 GMT. At 0700 GMT the rand inched 0,1 percent firmer to 13,6265 per dollar, after touching its weakest since October 6 on Friday as upbeat manufacturing data from the United States put bets of a rate hike there back on the table.
Yields on government bonds ticked up in early trade, with the benchmark paper due in 2026 adding 1 basis point to 8,4 percent. On Friday the People’s Bank of China cut interest rates and lowered the amount of cash banks must hold as reserves, triggering a rally in emerging market currencies.
“China is a premier buyer of SA exports, though the market was sceptical about whether increased stimulus will be enough to make a difference to demand for local resources,” analysts at NKC African Economics said. — Reuters