Home South African Rand weaker on Ukraine tension, US Fed worries

Rand weaker on Ukraine tension, US Fed worries

93

The South African rand weakened early on Tuesday, as worries about a potential military conflict in Ukraine and policy tightening by the US Federal Reserve made investors sell riskier assets.

File picture: Reuters/Siphiwe Sibeko

JOHANNESBURG – The South African rand weakened early on Tuesday, as worries about a potential military conflict in Ukraine and policy tightening by the US Federal Reserve made investors sell riskier assets.

At 8.35am SA time, the rand traded at 15.3200 against the dollar, down around 0.4% from its previous close.

Markets had until recently mostly shrugged off a build-up of Russian troops near Ukraine’s borders, but tensions have ratcheted up lately.

Nato said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets, while Russia denounced Western “hysteria”.

The US Federal Reserve begins a two-day policy meeting later on Tuesday, and investors will be anxious for hints about the timing and pace of interest rate hikes.

Limiting rand losses, on Thursday South Africa’s reserve bank is expected to raise rates by 25 basis points to 4.00% in response to rising inflation, according to a Reuters poll published last week.

The government’s benchmark 2030 bond was also weaker in early deals on Tuesday, with the yield rising 3.5 basis points to 9.335%.

ALSO READ: SARB’s Monetary Policy Committee expected to increase repo rate this week

– REUTERS

Previous articleRamaphosa releases SIU report into Covid-19 corruption
Next articleKremlin says watching US actions over Ukraine with great concern