* Rand firms, gains could be short-lived
* The currency could trade 8.30-8.50 ranges
JOHANNESBURG, June 12 (Reuters) – South Africa’s rand opened
firmer on Tuesday against the dollar buoyed by the inclusion of
its bonds in a prestigious index that helped it shake off
worries about Greece’s future in the euro zone.
The rand closely tracks the euro and worries about mounting
debt among the block’s members have hit the currency of Africa’s
largest economy, which relies heavily on Europe for trade.
The rand firmed half a percent to 8.424 against the dollar
at 0543 GMT from Monday’s New York close of 8.4750.
“What is helping the rand is the Citibank world bond index
announcement,” said Ion de Vleeschauwer, a trader at Bidvest
Bank said on the news that hit markets on Monday.
South Africa will join Citi’s influential World Government
Bond Index (WGBI) from October, conferring an important seal of
approval on the continent’s biggest economy after recent credit
outlook downgrades. {ID:nL5E8HB1G4]
Inclusion in the index should help Pretoria’s borrowing
plans for its multi-billion dollar infrastructure drive it says
will fuel economic growth after a 2009 recession, helping narrow
the budget deficit to about 3 percent of GDP by 2014 from 4.6
percent this year.
“But persistent euro weakness, will result in rand weakness.
There is no doubt about it,” added De Vleeschauwer.
The yield on the benchmark three-year note slid
2.5 basis points to 6.24 percent and that on the 14-year bond
was unmoved at 8.31 percent.
(Reporting by Vuyani Ndaba; Editing by Jon Herskovitz)
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