* Rand ranks among biggest losers for the year
* Foreign demand for bonds partly cushions currency
JOHANNESBURG Dec 30 (Reuters) – South Africa’s rand
rallied as much as 1.3 percent against the dollar on the last
trading day of the year on Thursday, but was set to finish
among the biggest annual losers in a year of global risk
aversion linked to the euro zone debt crisis.
The appeal of higher yields has however partly shielded
local debt from the sell-off, with benchmark bonds ending the
year sharply off September’s multi-month highs when the flight
to safe havens accelerated.
By 1502 GMT the local currency was 1.24 percent
stronger against the dollar at 8.0804 compared with Wednesday’s
close at 8.1816.
The rand has however shed nearly 22 percent of its value
against the dollar since the start of this year, faring only
slightly better than the Turkish lira and a handful of southern
African currencies, according to Reuters data.
Both the National Treasury and the Reserve Bank have said
the liquid nature of the rand makes it vulnerable to volatile
swings in global risk sentiment which have seen equally erratic
portfolio flows in and out of emerging markets this year.
Nomura emerging market analyst Peter Attard Montalto said
however that the rand had held up fairly well against this
year’s onslaught and could be set for a reprieve in 2012.
“We think the rand has reacted remarkably well compared with
previous risk events, and now has a lower beta to global risk
than it did in the past,” he told Reuters.
Continued…
