JOHANNESBURG, May 15 (Reuters)
South Africa’s rand strengthened on Monday, recovering from an all-time low versus the US dollar last week, when investors were alarmed by U.S. claims, denied by Pretoria, that South Africa had transferred armaments to Russia.
At 1543 GMT, the rand was trading at 19.0325 per dollar, 1.54% higher than its previous close.
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The currency, which was already under pressure due to the worst power outages on record, was hammered last week by investor fears about a US claim that a Russian ship picked up weapons in South Africa in December.
On Friday, it touched 19.51 to the US dollar, its lowest level ever.
South African officials quickly denied the US assertions, claiming that no armaments were sent to Russia in December.
According to Barclays analysts, the rand will not attract large capital inflows in the long run.
“Investors appear to simply not see value in the South African economy,” Barclays stated. “We do not believe this situation will change until there is material progress toward resolving energy or fiscal issues.”
The Top-40 (.JTOPI) and the broader all-share index (.JALSH) were practically flat on the stock market.
The yield on South Africa’s benchmark 2030 government bond fell 19.5 basis points to 10.745% in afternoon trade.
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