In anticipation of a lengthy four-day Christmas weekend, the South African rand rose against the dollar on Friday and was on course to post significant weekly gains.
The rand was trading at 16.9950 against the dollar at 1600 GMT, up 0.9% from the previous close.
Following a choppy year, the rand appreciated as a result of President Cyril Ramaphosa’s reelection as the head of the ruling African National Congress party earlier this week.
In the absence of significant local events, the risk-sensitive rand frequently takes its signals from global forces like the U.S. monetary policy.
Although the rand was substantially lower at the end of the year than it was at the beginning, ETM Analytics noted that the strength of the dollar was mostly to blame.
The experts continued, “The dollar remains overvalued and needs to correct, suggesting that 2023 may very well be the year when the rand puts on a strong display against the dollar.”
The Top-40 (.JTOPI) index of the Johannesburg Stock Exchange ended the day 0.33% higher, while the larger all-share (.JALSH) index concluded the day 0.37% higher.
The benchmark 2030 government bond’s yield remained at 10.170%.