South Africa’s rand has recently recovered against the dollar after hitting record lows in the previous session, but remained vulnerable to concerns about the local economy and that of China.
The rand rose a few cents after central bank data showed South Africa’s net gold and foreign exchange reserves were up slightly at $40.654 billion in December.
South Africa’s local currency had slid to a record low of 16.2015 as renewed concerns about China’s economy spurred an emerging markets sell-off.
It shed a quarter of its value against the greenback last year, undermined by worries about weak domestic growth and a global aversion to emerging markets as investors braced for the advent of policy tightening in the United States.
According to NKC African Economics in a note, “With U.S. jobs data looming and the situation in China still perilous, respite for the rand will likely only be temporary”.
On the South African bourse, the Top-40 index added 0.7 percent while the broader all-share was up 0.56 percent after each dropped more than 2 percent on Thursday.
Government bonds also recovered, and the yield for the benchmark maturing in 2026 retreated 4 basis points to 9.575 percent.
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