South Africa's rand slides alongside EM currencies, stocks steady

JOHANNESBURG: South Africa's rand extended its fall on Thursday, tracking emerging market currencies as the Turkish lira dropped, and as traders remained cautious ahead of a Moody's sovereign rating decision on Friday.

Stocks were mostly unchanged as losses in the bullion sector offset gains elsewhere.

At 1548 GMT, the rand was 0.27 percent weaker at 14.6450 to a dollar.

The rand marked a third consecutive session of losses as sentiment toward emerging market currencies was hit by a 5 percent drop in the Turkish lira, a key proxy along with the rand for demand for high-yield currencies.

The lira's slide overshadowed a decision by the South African Reserve Bank to keep its benchmark repo rate unchanged at 6.75 percent in a unanimous decision, saying the risks to the inflation outlook were "more or less evenly balanced".

Market focus was also on a sovereign rating by Moody's scheduled for Friday. Moody's is the only one of the "big three" agencies to rate South Africa at investment grade, with the sovereign rated "junk" by S&P Global Ratings and Fitch.

"It will be Moody's decision that ultimately decides how next week's price action will unfold," said Investec in a note to clients.

In fixed income, the yield on the government's 10-year issue  fell 2.5 basis points to 8.7 percent.

On the bourse, the Johannesburg All-Share index dipped 0.16 percent to 56,060 points, while the Johannesburg Top-40 index ticked up 0.01 percent to 49,903 points.

Among the decliners were gold stocks, which fell 6.15 percent on the back of a weaker bullion price.

Curbing further losses, Capitec Bank rose 3.86 percent to 1340.00 rand after reporting a 19 percent increase in annual profit on Thursday.