Rand could test R7.20 to the dollar

The rand was range bound in the morning session on Friday, but testing 7.20 against the greenback.

At 8.55am the rand was bid at R7.23 to the dollar from R7.25 at its previous close. It was bid at R9.67 to the euro, and R11.05 to the euro. The euro was bid at $1.3371 from $1.3358 previously.

A local trader said: "If we break that (R7.20) level, things could get interesting. In the meantime, we are range bound at 7.20-30 against the dollar."

RMB analysts said in a morning report that details on the approved $3.75bn loan to Eskom were scarce.  "Parastatal offshore debt issuance usually gets swapped in the market, implying a diluted FX impact at the end of the chain. Given the size of the flow, however, it wouldn't be surprising if the money goes straight to reserves - which is the usual process with central government issuances.

"Anyway, if you want to understand the rand you should be focussing on Greece's funding needs. The country's problems are rapidly spiralling out of control as the banking sector gets crushed," analysts John Cairns and Nema Ramkhelawan said.