JOHANNESBURG: South Africa's rand traded sideways against the dollar on Thursday after falling to fresh six year lows the day before, with the market bracing for a downgrade when Fitch and Standard & Poor's review the country's credit rating this week.
Government bonds yields hovered near Wednesday's multi-week highs, with latest data from the JSE securities exchange showing foreigners sold nearly 2 billion rand ($174 million) of local debt in the previous session. At 0700 GMT, the rand traded at 11.5285 to the greenback, barely changed from its close at 11.5375 in New York.
The local unit was within easy reach of Wednesday's low of 11.6000, its weakest since Oct. 2008, according to Thomson Reuters data.
The yield for the government bond maturing in 2026 , which the secondary market uses as a benchmark, dipped half a basis point to 7.945 percent, after climbing to a month high of 8.005 percent in the session before.
The rand has underperformed its emerging market peers this week, as a yawning current account deficit and a flare up in power shortages underline the weak growth prospects for Africa's most advanced economy.
This has raised fears that Fitch might downgrade Pretoria on Friday, following similar recent moves by fellow ratings agencies Standard and Poor's and Moody's.
"We expect these ... concerns to remain front of mind for the remainder of the week," Barclays Africa said in a note.
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