The rand strengthened against a weaker dollar in early trading on Friday, as investors remained optimistic about a potential peace deal between the US and Iran, despite renewed hostilities.
Last week, the United States and Iran exchanged fire in the most serious test of their month-long ceasefire.
However, Iran reported that the situation had returned to normal, while the US stated it did not wish to escalate tensions.
The rand traded at 16.4425 against the dollar, approximately 0.4% stronger than its previous close. Meanwhile, the dollar was weaker against a basket of currencies.
Traders were anticipating the monthly US employment report, set to be released later in the day, to help assess the future path of monetary policy.
South Africa’s net foreign reserves rose to $73.76 billion at the end of April, up from $73.19 billion in March, according to data released by the central bank on Friday.
Nedbank economists had projected that the country’s international liquidity would increase modestly to $73.57 billion, supported by lower foreign deposit receipts.
In the coming weeks, markets will closely monitor South Africa’s political developments as the stability of the Government of National Unity is tested, particularly with President Cyril Ramaphosa under scrutiny.
On Friday, South Africa’s highest court revived impeachment proceedings against President Ramaphosa concerning a scandal in which a large amount of foreign currency was stolen from inside a sofa at his farmhouse in 2020.
On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI) was last reported to be down 1.5%.
On Monday, 11 May, the rand was trading at R16.45 to the dollar, R22.34 to the pound, and R19.33 to the euro. Gold is trading lower at $4,675.16 an ounce, while oil prices were at $105.90 a barrel.
5 important things happening in South Africa today
Kganyago sends a warning to the US: Reserve Bank Governor Lesetja Kganyago has warned that the United States government’s over-indebtedness is becoming a growing concern. The governor said the political will to lower debt appears to be missing in many developed nations, even as new spending pressures are building. [Daily Investor]
The DA in hot water: In Cape Town’s affluent suburbs, traditionally a stronghold for the DA, signs of political discontent are emerging. In areas like Constantia, many long-time DA voters are frustrated with rising municipal costs and a perceived shift away from their needs. [Business Day]
New SARS criminal tactic targeting companies: Hacker group SilverFox has been linked to a campaign in South Africa that used fake notifications from the South African Revenue Service (SARS) to breach company systems. [MyBroadband]
More than R80 billion down the drain: The government has acknowledged the failure of the bus rapid transit (BRT) programme, despite spending over R80 billion on integrated public transport systems over two decades. With the project abandoned, cities facing budget cuts are now seeking solutions. [TimesLive]
Western Cape faces severe storms: The South African Weather Service (SAWS) has issued another level 8 warning over heavy rain and possible flooding in the Western Cape. Spokesperson Jo-Anne Otto said while more rainfall is expected in mountainous areas, residents must be prepared for emergencies. [EWN]
