The rand traded in line with emerging-market currencies on Friday morning, clawing back some of the sharp losses incurred over the past several weeks.<\/p>\n
\u201cThe rand has continued on its merry way and yesterday tested the R14.00 level in afternoon trade.<\/p>\n
“Just as a measure of how volatile the rand has been in the past six weeks we have seen the rand lose over R2.50 since the middle of August but the rand has clawed back R1.70 since we reached the R15.70 high. It seems that the EM tantrum has dissipated somewhat as investors have seen some value in EM again,” said Andre Botha, a senior dealer at TreasuryONE.<\/p>\n
“This could go a long way in explaining the movement in the rand in the past couple of weeks, as no big news story suddenly turned the risk sentiment and a correction in EM currencies happened.”<\/p>\n
TreasuryONE noted that the rand was also helped by a weaker US dollar, which still remains key to the direction of the local unit.<\/p>\n
“With the rand enjoying the recent run we expect that a combination of position squaring and a slightly stronger dollar could see the rand drifting a little higher as we close off the month,” said Botha.<\/p>\n
“Today we have the release of the South African Trade Balance, and should the number surprise to the negative side we could see some rand weakness. However, with the market looking at new catalysts we expect today to be range-bound with a bias to a little weakness.”<\/p>\n
The rand is expected to trade between R13.95 and R14.25 to the dollar on Friday, NKC African Economics wrote in a note, as cited by Reuters.<\/p>\n
A senior analyst at ratings agency S&P Global meanwhile, said on Friday that president Cyril Ramaphosa’s stimulus plan did not affect the stable outlook on the country’s sovereign rating, Reuters reported.<\/p>\n
Last week, Ramaphosa unveiled a stimulus and recovery plan to spur growth. It envisions R50 billion ($3.5 billion) being redirected to projects that can help create jobs for the 27% of the workforce that\u2019s unemployed, a new multibillion-dollar infrastructure fund and new rules for the mining and energy industries to spur investment.<\/p>\n
A review of power, rail and port tariffs, and less stringent visa rules are also on the cards.<\/p>\n
\u201cWe are going to reprioritise our budget,\u201d Ramaphosa said in an interview with Bloomberg TV<\/a><\/strong> in New York on Wednesday (26 September).<\/p>\n \u201cWe are currently looking at where we can reprioritise spending and where we can get this R50 billion. We are going to put quite a lot of it in small and medium enterprises, agriculture, promote businesses in the townships and rural areas.\u201d<\/p>\n The president also said that the rand is undervalued. \u201cWe want the rand to be well-balanced as to be able to support the economic trajectory of the country.\u201d<\/p>\n In morning trade on Friday, the local unit traded at the following levels against the major currencies:<\/p>\n