S Africas Rand Bounces Back After New Low

Dealers said investors who had sold the rand short earlier in the week scrambled to pocket their gains after it hit a lowest ever 4.7670/7720 against the dollar.

In just over two hours a buying frenzy swept the unit back below the 4.70 level, where it once again became a target of sales by banks and companies seeking dollars to pay for imports.

Peter Lane, head of treasury at UAL Merchant Bank, said some big overseas operators had already started to sell dollars for rand on Wednesday and the bandwagon gathered momentum on Thursday.

Yesterday we started seeing some of the smarter London players taking profits...the dollar selling pressure built up and then there was a massive scramble among speculators to cover their positions, he said.

 

The rands recovery helped stocks and bonds with the Johannesburg Stock Exchange all-share index rising 0.75 per cent by midday and bond yields pushing back briefly below the psychological 16 percent level.

Dealers said Thursdays recovery suggested the rand was at least pausing in its previously seemingly inexorable slide, which has seen the currency shed 30 percent of its value against the dollar since mid-February.

The currency recovered to 7.67 against the British pound after hitting 7.78.