The rand hovered near the previous day’s four-month highs against the dollar today as risky assets remained in demand and markets applauded a largely trouble-free national election. A Reserve Bank report showed the country’s gross reserves ticked higher to US$ 49.555bn at the end of April from US$ 49.454bn in March, mainly due to the stronger rand during the month.
This morning the rand traded at ZAR 10.3400 against the greenback, little-changed from its previous close at R10.3355. It was within easy reach of Thursday’s near 5-month high of R10.3125.
“All emerging market high-return currencies are in vogue and rallying hard. It is true, though, that the rand did particularly well yesterday. The election is the obvious explanation,” Rand Merchant Bank analyst John Cairns said in a market note. The ruling ANC is on track for a strong victory in the poll, fending off a challenge by Julius Malema’s radical Economic Freedom Fighters whose leftist policies had worried investors.
The Rand has reversed sharp losses against the dollar earlier in the year, and is now up 1.4% since January 1.