Home South African Rand extends gains as rating agencies maintain outlook

Rand extends gains as rating agencies maintain outlook

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The rand extended gains on Monday, passing the 18-month best reached on Friday as the currency drew strength from rating agencies holding the country’s credit rating and outlook at current levels.

File image: Nadine Hutton/Bloomberg

THE RAND extended gains on Monday, passing the 18-month best reached on Friday as the currency drew strength from rating agencies holding the country’s credit rating and outlook at current levels.

At 06.50 GMT the rand was trading at 13.9350, up 0.3 percent against the dollar. It had raced past its December 2019 level to 13.9400 on Friday evening after the central bank said it could raise interest rates if consumer prices keeps rising.

S&P Global Ratings late on Friday affirmed South Africa’s long-term foreign currency rating at BB-, three notches below investment grade, and kept local currency debt at BB. It predicted a stable outlook for both.

Fitch also affirmed South Africa’s long-term foreign currency issuer default rating at BB- on Friday and maintained a negative outlook.

The agencies cited South Africa’s improving public finances, primarily because higher commodity prices helped to lift tax revenue last year.

Analysts have said that rising commodity prices could also help to boost government revenue for the 2021/22 financial year.

REUTERS