Money SA economy
A firm rand was range bound in morning play, despite evidence suggesting that the government is trying to weaken the local currency, RMB analysts said.
At 09.00am local time the rand was bid at R7.60 to the dollar, R9.87 to the euro and R11.61 to the pound. The euro was bid at $1.2995 from $1.2938 overnight.
A local dealer said: "We tried to break through 7.68 against the dollar yesterday and failed. We are back at 7.62 this morning, needing to break through 7.58, to get interesting."
RMB analysts noted in a morning report that yesterday's Organisation for Economic Cooperation and Development (OECD) report joined the chorus for a weaker rand.
"They argue that the cost of an overvalued rand is likely to be higher than the cost in buying up reserves. Importantly, the intervention policy should only continue if it is consistent with the inflation target," RMB analysts said.
"The OECD report comes at time when evidence is starting to emerge that the government is actually trying to weaken the rand.
The authorities have been saying for a while that they have been acting in the market. No evidence of this has been seen in the SARB's net reserves.”
