South Africa's rand slightly firmer after reserves data

JOHANNESBURG: South Africa's rand was slightly firmer against the dollar on Wednesday after better than expected foreign exchange reserves data.

The rand was at 10.6250 to the dollar at 0703 GMT, up 0.2 percent from Tuesday's New York close.

Data from the Reserve Bank showed that South Africa's net gold and foreign exchange reserves rose to $45.479 billion in December from $45.43 billion in November. Gross reserves also increased to $49.587 billion from $49.348 billion in November.

Economists polled by Reuters had forecast a decline in net reserves to $45.33 billion and gross reserves of $49.093 billion.

The rand was expected to trade in a narrow range in Wednesday's session but would remain vulnerable in the near term given South Africa's weak economic fundamentals and the threat of labour unrest.

"Unfortunately, with South Africa's gaping current account deficit and labour tensions able to cripple local economy, investors are looking to send money elsewhere," NKC senior economist Christie Viljoen wrote in a note.

Government bond yields edged higher, with the 2026 government bond adding half a basis point to 8.22 percent while the 2015 paper was up one basis point at 6.18 percent.