The rand has weakened by around 1% against a basket of major currencies in early trade, despite the dollar trading nearly unchanged at its slightly stronger level against the euro and the pound.
At the same time, bond yields of the R186 government bond are five basis points higher compared with Tuesday’s Johannesburg Stock Exchange close at 8.4-9%.
This means that the R186 has become cheaper, as bond prices move inversely to bond yields, and could point to the outflow of foreign currencies, accounting for some of the rand’s weakness.
However, political uncertainty over President Cyril Ramaphosa’s eventual Cabinet appointments is also hurting sentiment.
The rand is currently trading at its weakest level in five-months at R14.86 to the dollar.
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