South Africa's rand falls on subdued risk appetite

JOHANNESBURG: South Africa's rand slipped in early trade on Monday, as a surge in COVID-19 infections globally due to the Omicron variant dampened risk appetite.

At 0635 GMT, the rand traded at 15.9675 against the dollar, 0.14% weaker than its previous close.

While South Africa has said it believed it had passed the peak of a wave of coronavirus infections caused by the highly contagious Omicron variant, a surge of infections in other countries remained a concern for investors.

Investor focus at the start of the new year was also on how the US Federal Reserve plans to taper monetary stimulus, especially in light of the spreading Omicron variant.

Fed moves affect emerging markets including South Africa as US interest rate hikes tend to drain capital away from the higher-yielding but riskier markets, weighing on their currencies.

In fixed income, the yield on the benchmark 2030 government bond was flat at 9.35%.