South Africa’s rand firms after surprise rate cut to 6.5%

By bne IntelliNews March 28, 2010
South Africasrand firmed, Friday, after a surprise interest rate cut of 50 basis points inthe repo rate, to 6.5%, the day before. Reserve Bank governor, Gill Marcus,said rand strength could harm economic growth and fairly high rates attractinflows, supporting the currency. Compared to rates elsewhere, the countrysrates are still high and a euro rebound helped support the rand, as did afirmer gold price. Government bonds rode higher, Reuters reported, with yieldsfalling to near one-year lows as investors acknowledged probable lowerinflation and a central bank more concerned with growth prospects and carrytrade on the rand.

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