JOHANNESBURG – South Africa’s rand recovered against the dollar on Friday after hitting record lows in the previous session, but remained vulnerable to concerns about the local economy and that of China.
The rand rose a few cents after central bank data showed South Africa’s net gold and foreign exchange reserves were up slightly at $40.654 billion in December.
At 0704 GMT, the rand traded at 15.9400 to the greenback, a 0.9 percent gain over Thursday’s close at 16.0850.
The local currency had slid to a record low of 16.2015 as renewed concerns about China’s economy spurred an emerging markets sell-off.
The rand shed a quarter of its value against the greenback last year, undermined by worries about weak domestic growth and a global aversion to emerging markets as investors braced for the advent of policy tightening in the United States.
“With US jobs data looming and the situation in China still perilous, respite (for the rand) will likely only be temporary,” NKC African Economics said in a note.
On the South African bourse, the Top-40 index added 0.7% while the broader all-share was up 0.56% after each dropped more than 2% on Thursday.
Government bonds also recovered, and the yield for the benchmark maturing in 2026 retreated 4 basis points to 9.575%.