* Gloomy global outlook weighs on rand
* Bonds retreat, investors on sidelines ahead of auction
JOHANNESBURG, March 5 (Reuters) – South Africa’s rand
was on track for its second consecutive daily loss against the
dollar on Monday, weighed down by a gloomy global economic
outlook which dented emerging market sentiment.
But local markets were reassured that monetary policy
remains intact after a senior official from the ruling ANC said
there was no need for discussion of the central bank’s mandate,
as the Bank was already aware it must pursue inflation targeting
with economic growth in mind.
The ANC’s powerful labour union allies have in the past
accused the Reserve Bank of blindly focusing on its mandate to
keep inflation within a 3-6 percent target band at the expense
of economic growth.
The rand took most of its direction on Monday from
internatonal market trends, with a raft of recent economic data
pointing to weak global growth.
The local currency hit a session trough of 7.59
against the dollar, its weakest level in seven days, and was
0.42 percent weaker at 7.5531 by 1639 GMT compared with Friday’s
close at 7.5185.
Bearish comments last week out of the U.S. Federal Reserve,
a lower growth forecast for China and weak PMI data out of
Europe were all weighing against the rand, ETM market analyst
Sean McCalgan said.
“It’s really a combination of a weaker growth picture in the
short term and I think that’s the bulk of where the rand is
taking its direction from,” McCalgan said.
Continued…
