Feb. 13 (Bloomberg) -- The rand strengthened for the first time in three days as stocks and commodity prices gained after the Greek parliament approved austerity measures to secure an international bailout, boosting demand for riskier assets.
South Africa’s currency appreciated 0.7 percent to 7.6992 per dollar as of 4:37 p.m. in Johannesburg. Against the euro, it gained 0.4 percent to 10.1903.
Passage of Greece’s austerity bill will help the country prevent a default and allow it to remain part of the euro area, Prime Minister Lucas Papademos told parliament, shifting the spotlight to a meeting of euro-area finance ministers who must decide whether to approve the rescue. The euro, which pays for about 30 percent of South Africa’s exports, approached to a two- month high against the dollar. The Standard & Poor’s GSCI Index of raw materials gained as South Africa’s benchmark stock index rallied, led by commodity exports including Anglo American PLc and BHP Billiton Ltd.
“With the crisis in Greece simmering down, the euro has rallied strongly this morning, pulling the rand along with it,” Standard Bank Group Ltd. analysts Nomvuyo Guma and Tebogo Mosepele said in an e-mailed note today. “The positive sentiment all round could see the rand strengthen further into the week.”
The rand also rallied after Central Bank Governor Gill Marcus apologized for “confusing” markets on Feb 10 with a statement that she was planning a joint announcement “of national importance” with President Jacob Zuma and Finance Minister Pravin Gordhan, fueling speculation that helped drive the rand down as much as 2.6 percent.
Mandela on Notes
The nation’s new bank notes will bear the image of former president Nelson Mandela, Zuma and Marcus announced on Feb. 11.
“When the three pillars of economic policy issue a joint statement to inform markets that there will be an announcement of national importance, imaginations can run wild, and they did,” George Glynos, an economist at Johannesburg-based ETM Analytics, wrote in e-mailed comments today. “The net result is that the rand weakened significantly further than other emerging-market currencies. The bulk of that South Africa- related weakness is now back out of the price.”
South Africa’s 6.75 percent bonds due 2021 gained for the first time in seven days, driving the yield down six basis points, or 0.06 percentage point, to 7.82 percent.
--Editors: Ash Kumar, Peter Branton
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