JOHANNESBURG – The rand fell more than 1.5% on Monday after the public protector agency recommended changing the constitution to force the central bank to promote economic growth rather than currency and price stability.
Stocks gained as oversold shares attracted buyers.
By 00:30 Tuesday morning, the rand was trading 1.44% weaker to the dollar at 12.99, having hit a session low of 13.0525.
In her recommendations, Public Protector Busisiwe Mkhwebane said the constitution should be changed to make promoting balanced and sustainable economic growth the South African Reserve Bank’s primary objective. The central bank said it would respond later.
“The market doesn’t like it because they want to interfere in institutions like the Reserve Bank,” said Treasury One chief currency dealer Wichard Cilliers
Government bonds also weakened, with the yield for the benchmark instrument due in 2026 rising 6 basis points to 8.545, after adding as much as 11 bps earlier.
Shares in Barclays Africa Group closed the day down 0.91% to R145.17 after reversing some of its losses in the session.
On the stock market, the benchmark Top-40 index was up 1.95% at 45,381 points and the broader All-share index rose 1.54% to reach 51,616 points.
The blue-chip top 40 index closed lower in the previous two sessions after dropping to its lowest in nearly two and a half years low on Thursday. A revised mining charter had sparked a selloff in mining shares.
“Our market is just bouncing on the back of oversold levels. Its just a bit of a broad-based rally,” said BP Bernstein trader Vasili Tirasis.
Among shares gaining the most were Naspers, up 3.88% to R2594.91; Mondi, up 6.24% to R347.74; and Discovery, up 3.81% to R129.37.