CAPE TOWN: South Africa’s rand firmed on Tuesday as global risk appetite improved and markets appeared to shrug off worries that U.S.-China trade tensions could damage global growth.
Stocks ended lower as African Rainbow Minerals shares fell after an attack on its miners that led to six deaths.
The trade war fears had dampened global risk appetite but the rand remains an emerging market favourite following a ratings reprieve by Moody’s last month and data suggesting the continent’s most industrialised country was on track for faster growth.
Moody’s affirmed South Africa’s debt at “Baa3”, the lowest rung of investment grade, but changed the country’s credit outlook to stable from negative.
“The (central bank) decision to reduce the interest rate in March may slow down the pace of the appreciation in the rand in the near-term,” Nedbank analysts wrote in a note.
The rand has appreciated 7 percent against the dollar since late December when President Cyril Ramaphosa succeeded Jacob Zuma as head of the ruling African National Congress party. Ramaphosa was appointed head of state following Zuma’s resignation in February.
