South African rand opens stronger after positive data

JOHANNESBURG (Reuters) – South Africa’s rand opened stronger on Friday and was on course for gains of roughly 2% against the dollar this week, after the first current account surplus in 17 years and an upbeat U.S. jobs report.

At 0650 GMT, the rand traded at 16.9350 versus the dollar, around 0.3% firmer than its previous close.

Government bonds were flat, with the yield on the 2030 bond at 9.27%.

On Thursday, central bank data showed a 1.3% of gross domestic product (GDP) surplus on the current account, which has long been a sore spot for Africa’s most industrialised economy. That added to optimism from the U.S. economy creating jobs at a record clip in June.

Although the rand has enjoyed a good week, it is still down some 17% against the U.S. currency so far this year, partly a reflection of deep-seated concerns about the health of domestic public finances.

The finance ministry predicts a deficit on its main budget of more than 14% of GDP this fiscal year and an economic contraction of over 7% in 2020. An economic recession that began last year deepened in the first quarter, before the coronavirus crisis really took hold, data showed this week.

Partner Content

Standard Chartered and Airtel Africa form a partnership to drive financial inclusion across Africa

Dubai, United Arab Emirates / London, United Kingdom – 13 August 2020: Standard Chartered Bank and Airtel Africa have today announced a...

THE FUTURE JUST ARRIVED: THE ROLE OF BANKS IN A POST-COVID WORLD

THE COVID-19 GLOBAL pandemic has brought forward the future. It has brought about humanity’s biggest challenge in a century, to choose between...

Mauritius-Africa, a partnership for shared prosperity

By: Mathieu Mandeng In the current complex and challenging circumstances that are testing the...

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

- Advertisement -