July 5 (Bloomberg) -- The rand weakened for the first day in seven against the dollar on speculation Standard & Poor’s may give Greece’s bonds a default rating, curbing demand for higher- yielding assets.
The currency of Africa’s biggest economy declined as much as 0.7 percent to 6.7689 per dollar, and traded 0.1 percent weaker at 6.7260 as of 6:41 p.m. in Johannesburg. The rand strengthened for a fourth day against the euro, gaining 0.3 percent to 9.7347.
A rollover plan for financial aid to Greece, serving as the basis for talks between investors and governments, would qualify as a distressed exchange and prompt a “selective default” rating, S&P said yesterday. European finance ministers agreed on July 2 to disburse an 8.7 billion-euro ($12.6 billion) loan payout to Greece by mid-July.
“The rand continues to take direction from offshore developments,” Standard Bank Group Ltd. analysts including Johannesburg-based Michael Keenan wrote in an e-mailed note today. “Reports that some of the rating agencies might regard the rolling over of debt by Greece as a technical default could see risk appetite come off the boil.”
Government 13.5 percent notes due 2015 climbed 2 cents to 121.23 rand, driving the yield down one basis point, or 0.01 percentage point, to 7.483 percent. The 6.75 percent securities due 2021 rose 4 cents to 89.091 rand, driving the yield down less than one basis point to 8.411 percent.
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