JOHANNESBURG: South Africa's rand firmed to its strongest in nearly three months against the dollar on Thursday, boosted by a search for higher yield after the central bank left its repo rate unchanged and analysts ruled out any imminent policy easing.
Stocks were largely flat even though the resources sector recovered after a dip in the previous session on weak production results.
South Africa's Reserve Bank kept its benchmark repo rate unchanged at 7 percent, as expected, saying that while it was still concerned about inflation, the weak economy had provided some room to delay further policy tightening.
At 1606 GMT, the rand traded at 14.2220 per dollar, 0.89 percent firmer from its New York close on Wednesday.
The currency had firmed to 14.1620 versus the dollar in the session, its strongest level since April 29, according to Thomson Reuters data.
"International markets are looking for yield, especially if they know the rates are going to stay at these current levels. It's just more of a yield seeking adventure for investors currently," Treasury One dealer Phillip Pearce said.
On the bourse, the benchmark Top-40 index ticked up 0.16 percent to 46,272 points while the All-Share index strengthened 0.26 percent to 52,974 points.
Among the blue chip index toppers were mining companies Anglo American Platinum Limited, which rose 6.30 percent to 390.11 rand, Anglo American as it strengthened 3.79 percent to 149.29 rand and BHP Billiton gaining 2.32 percent to 177.84 rand.
"Movements on the individual stocks were concentrated on the resources sector. There was a recovery in underlying commodities that boosted those types of stocks," said Global Trader head of trading, Nilan Morar.
On the bond market, government bonds also gained, and the yield for the benchmark instrument due in 2026 dipping 4 basis points to 8.75 percent.
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