Rand flat, shrugs off govt sale of Vodacom stake

Local unit appeared unfazed by news that Greece defaulted on its IMF payment.

South Africa’s rand was flat against the dollar on Wednesday, shrugging off news that the government had sold off its stake in mobile phone company Vodacom to raise money for troubled power utility Eskom.

The local unit, boosted in the previous session by news that South Africa’s trade balance swung into an unexpected surplus in May, also appeared unfazed by news that Greece had defaulted on its IMF repayment, a move likely to dent risk appetite.

At 07:21 GMT, the rand was changing hands at 12.1700 versus the dollar, bang in line with its close in New York on Tuesday.

Government bonds were similarly steady, with the yield for debt due in 2026 easing just one basis point to 8.285%.

The local unit however remains vulnerable to downturns in global risk appetite, given South Africa’s chronic deficits on the current account and national budget, as well as the worst electricity crunch since 2008.

“It is possible that we could see further strengthening of the rand on the back of yesterday’s trade data, but in my opinion this merely offers better levels to accumulate dollars,” Standard Bank trader Inshaan Omar said.

“All important US non-farms numbers (are out) tomorrow and with headlines around the goings-on in Greece likely to feature into the weekend, we could be in for illiquid conditions.” 

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