JOHANNESBURG: South Africa's rand was largely unchanged against the US dollar on Friday, after falling 1 percent in the previous session as chronic power shortages underlined the fragile state of the economy ahead of credit rating decisions.
By 0709 GMT, the rand traded 0.06 percent firmer at 11.6235 per dollar, after closing overnight in New York at 11.6335/$.
The local unit fell to a fresh six-year low on Thursday, with some analysts betting the currency will weaken further as Fitch and Standard and Poor's release credit reports later in the session.
Yields on government bonds rose to continue a week of heavy off-shore selling, with the benchmark paper due in 2026 adding 8 basis points to 7.98 percent.
On Thursday government announced a multi-billion rand emergency plan to rescue ailing power utility Eskom, placing it under the watch of National Treasury while funding an increase of gas and diesel imports to avert South Africa's worst electricity shortages since 2008.
Standard and Poor's cited uncertain energy supply and widening budget and current account deficits when it downgraded South Africa's credit rating in June, and Fitch could follow suit after issuing a negative outlook in the same month.
"The Rand has some of this uncertainty priced in, however, should Fitch cut our rating, the knee-jerk reaction could see it trading above 11.70 quite quickly," said Warrick Butler, an executive trader at Standard Bank.
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