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South Africa's rand weaker after Moody's report
(Updates to reflect afternoon trading)
JOHANNESBURG, April 16 (Reuters) - South Africa's rand
slipped on Tuesday, as Moody's warned of risks to the country's
last investment grade credit rating including rising government
debt and slow economic growth.
At 1536 GMT, the rand was down 0.3 percent against
the U.S. currency at 14.0900 per dollar, heading for a second
straight day of losses.
Markets are sensitive to any pronouncement Moody's makes on
Africa's most industrialised economy, as a downgrade to "junk"
status by the credit agency could trigger a large selloff in
South African debt.
Moody's said in a research note that while the outlook on
South Africa's Baa3 rating was stable, it did not see growth
picking up significantly because of constraints like skills
shortages and power supply problems.
The rand strengthened to below 14.00 per dollar last week
for the first time since late February, as appetite for riskier
emerging market assets was helped by signs of progress in trade
talks between the United States and China.
But it has now fallen around 0.8 percent against the dollar
since Friday. Trading volumes are expected to be muted this week
ahead of Easter public holidays.
In fixed income, the yield on the benchmark 2026 government
bond was flat.
On the Johannesburg bourse, stocks followed international
equities markets higher.
The Johannesburg Stock Exchange's Top-40 Index
gained 1.2 percent to 52,590 points, while the wider All-share
Index gained 1.1 percent to 58,902.
"It's on the back of positive sentiment on international
bourses led by Chinese markets up more than 1 percent this
morning. That followed suit in developing markets," said FFO
Securities portfolio manager Wilmar Buys.
Telecommunications company MTN led the blue-chip
index, gaining 3.97 percent to 101.89 rand. There were also
gains for miners like AngloGold Ashanti, which rose by
3.18 percent to 186.38 rand.
($1 = 14.0400 rand)
(Reporting by Naledi Mashishi and Alexander Winning
Editing by Frances Kerry)
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