* Rand vulnerable to wide swings in illiquid market
* Bonds flat in lacklustre year-end trade
JOHANNESBURG, Dec 28 – South Africa’s rand was little
changed from its previous close and government bonds were also
largely flat in sluggish trade on Wednesday, with most players
out of the market until the start of the new year.
The rand traded at 8.1530 against the greenback at
0653 GMT, down just 0.04 percent from Tuesday’s close.
“It’s been very stagnant, I still think euro zone
developments will be the major driver and the rand will trade
accordingly,” a Johannesburg rand dealer said.
“It’s very thin; and just looking at the price action this
morning, markets are illiquid. So any kind of big order will
drive the market in a particular direction. Barring that the
euro zone story will be the main driver for the rand.”
South Africa’s financial markets reopened on Wednesday after
staying closed for public holidays on Monday and Tuesday.
Government bonds were steady in early trade, with the yield
on the benchmark 2015 bond dipping half a basis point
to 6.75 percent while that for the 2026 bond was flat
at 8.52 percent.
The domestic unit has shed nearly 23 percent of its value
against the dollar so far this year, largely due to a global
sell-off of risky assets over fears of contagion from debt
problems in the euro zone.
Barring a surprise recovery in the last few days of the
year, it is set for its steepest annual fall since 2008.
(Reporting by Stella Mapenzauswa; Editing by Ed Stoddard)
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