Rand ends the day stronger
Andrew Linder
The rand remained firmer against the dollar after President Cyril Ramaphosa lifted some of the restrictions imposed on self-generation of power. Although pulling back a little in late-afternoon trade, the rand closed the day stronger, gaining 0.87% to R13.5976/$.
The rand remained firmer against the dollar after President Cyril Ramaphosa lifted some of the restrictions on companies generating their own power.
Though pulling back a little in lateafternoon trade, the rand closed the day stronger, even after data on Thursday showed inflation in the US accelerated to 5% in May from 4.2% the previous month.
While inflation fear in the US in recent months has seen US bond yields rise, this was not the case on Thursday when the 10-year yield fell by a basis point to 1.47%.
Central bankers have been urging markets to ignore the higher inflation rate as they believe it is temporary as the world recovers from the economic devastation of the Covid-19 pandemic.
“The Fed was united and unwavering in its message, and the market bought it,” said Oanda analyst Sophie Griffiths.
At 5.40pm, the rand had gained 0.87% to R13.5976/$, 0.94% to R16.5446/€ and 0.61% to R19.2408/£. The euro had fallen 0.1% to $1.2168.
Government bonds also firmed, with the yield on the R2030 falling six basis points to 8.65%. Bond yields move inversely to their prices.
Earlier, President Cyril Ramaphosa announced that the licence-free threshold for companies wanting to generate their own power would be lifted to 100MW, from the current 1MW and a recently gazetted proposed amendment by mineral resources & energy minister Gwede Mantashe to raise it to 10MW.
The announcement was well received by companies and civil society. The Organisation Undoing Tax Abuse’s (Outa) said: “After grim days of load-shedding, SA’s future is brighter with the announcement that red tape is being cut for embedded generation projects.
“The need for the presidential intervention in this is a clear indication to us that it’s time for minister Mantashe to be moved out, to make way for someone who understands and will drive a strong renewable energy future for SA,” said Outa’s parliamentary and energy adviser, Liz McDaid.
North West University Prof Raymond Parsons said: “The positive statement by President Cyril Ramaphosa today on a more liberal approach to energy supply in SA is good for investment sentiment at a time when the country needs to take full advantage of the current economic recovery.”
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2021-06-11T07:00:00.0000000Z
2021-06-11T07:00:00.0000000Z
https://tisobg.pressreader.com/article/282007560333539
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