Rand gains 0.8% in the week to R16.50 as bond yields fall

The rand ended the week stronger against the dollar, with the Reserve Bank’s 10:30 rate at R16.50 on Friday 6 November. That was 0.8% below the R16.64 recorded a week earlier on 30 October, so each dollar cost fewer rand.

All of the weekly gain came between Tuesday and Thursday. The rate fell from R16.64 on Tuesday 3 November to R16.36 on Thursday 5 November, a drop of 1.7%, its lowest reading in the six weeks of data checked. The Reserve Bank’s series has no rate for Wednesday 4 November. On Friday the rand gave back 0.9% of that move. The rate is a weighted average of the banks’ quotes at about 10:30 SAST, and the Reserve Bank publishes it each business day. The week before, the rand lost 0.5%, when the dollar went from R16.56 to R16.64, and the dollar reached R16.68 on Monday 2 November. Our story on the rand to 23 October has the earlier run.

Gold rebounded. The London price, the average of the morning and afternoon fixings, was US$4,118.25 an ounce on Thursday, Reserve Bank data show. That was 2.3% above US$4,026.55 a week earlier and 5.1% above the US$3,919.70 recorded on Tuesday 3 November. The Reserve Bank had not yet published Friday’s fixings at the time of writing. Tuesday’s price was 6.4% below the US$4,185.55 recorded on 16 October, and Thursday’s level is still below that 16 October figure.

Government bonds firmed. The yield on the R209 bond, which matures in 2036, closed at 8.40% on Thursday, against 8.71% on 30 October. That is 31 basis points lower in a week and 61 lower than the 9.01% recorded on 28 September. The yield fell 19 basis points between Tuesday and Thursday, from 8.59% on Tuesday. The Reserve Bank had not yet published Friday’s close. Two weeks earlier, on 23 October, the yield closed at 8.765%, which makes Thursday’s close 36.5 basis points lower over the fortnight.

The Reserve Bank’s policy rate stays at 7.25%, its current market rates page shows. Our fuel levy explainer and the report on the last fuel price change show how the exchange rate feeds into pump prices.

Over the six weeks of Reserve Bank data checked, the dollar ranged from R16.36 on 5 November to R16.68 on 2 November. The central bank’s next rate decision is on 19 November, its monetary policy calendar says.