JOHANNESBURG: South Africa's rand softened against the dollar on Friday following strong gains the previous day, while government bonds gained as investors fretted about the impact of electricity supply shortages on the economy.
At 0641 GMT the rand was trading 0.31 percent softer at 11.3100 to the dollar compared with its Thursday closing level of 11.2750. The currency had climbed to its highest in two-months against the greenback on Thursday.
Yields on government bonds fell, with the 2026 benchmark down 7.5 basis points to 7.275 percent.
Power utility Eskom has been forced to implement controlled outages for four consecutive days to avoid triggering a total collapse of the national grid as it struggles to meet demand.
On Thursday, cash-strapped Eskom said power outages had reached "Stage 3", which means it has to cut up to 4,000 megawatts from the grid. "Stage 3" is one level before a complete blackout.
"There is so much bad news locally to point to extended weakness in the currency," Standard Bank currency analyst Oliver Alwar wrote in a market note, citing Eskom as "a big problem".
On Thursday data showed that business confidence in South Africa registered its slowest start for the year in nearly two decades as the economy grapples with global and local headwinds, including the power cuts.
Investors also remained wary ahead of the US non-farm payrolls report for January later in the session.
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