JOHANNESBURG Aug 14 (Reuters) – The rand held its ground
against the dollar in thin Tuesday trade, with steady foreign
flows into government bonds ahead of their inclusion in a key
global index in October seen supporting local assets in coming
weeks.
The currency and debt markets took this week’s violence
between rival unions at platinum producer Lonmin
in their stride, although sentiment could turn negative
if clashes spread to other mines.
By 1655 GMT the rand was at 8.1685/dollar, barely
changed from Monday’s close at 8.1640.
With little on the local calendar to drive markets, the
focus was still mainly on the global arena where hopes of policy
easing to help struggling leading economies has triggered carry
trades in favour of high-yielding emerging market assets.
“Over the short term, we would not be surprised to see
the rand enjoying some buoyancy into hopes in global markets for
decisive action from the big central banks,” Standard Bank
strategists Bruce Donald and Varushka Singh said in a note.
“The rand should receive more support in the coming weeks
from World Government Bond Index related flows.”
Data shows foreign accounts have bought more than 50 billion
rand worth of local bonds since Citigroup announced it would
include South African debt into the index, tracked by many fund
managers.
Bonds however weakened on Tuesday, partly due to the
National Treasury injecting 2.1 billion rand of new paper at its
weekly primary auction.
The yield on the three-year benchmark edged up a
basis point to 5.68 percent while that for the 14-year issue
was up four basis points at 7.49 percent.
(Reporting by Stella Mapenzauswa; editing by Ron Askew)
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