The rand was firmer against major currencies on Tuesday morning as investors continued to digest news of a rate cut in China. The People’s Bank of China (PBoC) delivered a surprise 25 basis point cut in interest rates to 4.6% on Tuesday as well as a 50 basis point cut in the amount of cash banks have to hold in reserve (reserve-requirement ratio).At 8.40am‚ the rand was at R13.0972 against the dollar from a previous close of R13.1956.Against the euro the rand was at R15.0378 from a previous close of R15.1980. Against the pound‚ the rand was at R20.5580 from R20.7001.The euro was at $1.1481 from $1.1517 previously.Earlier this week the rand weakened significantly against major trading partners.In response‚ the South African Reserve Bank released a statement in which it said it was not "completely indifferent to exchange rate movements" and that "in the event of developments that threaten the orderly functioning of markets or that may have financial stability implications‚ the (Bank) may consider becoming involved in foreign exchange markets to ensure orderly market conditions".Investec chief economist Annabel Bishop said if the Bank used its foreign reserves to protect the rand‚ it would quickly run out."Such intervention would (be) likely (to) stimulate directional speculative trading‚ as occurred historically‚ driving the rand even weaker."Ms Bishop said other potential interventions included limiting foreigners’ daily or weekly sales of South African portfolio assets‚ which would run contrary to the trend of capital liberalisation and could result in minimal new inflows. She said minimal new inflows would have repercussions for the funding of SA’s trade deficit."This would (be) likely (to) cause further material currency depreciation and further limit SA’s economic growth. Overly heavy involvement in the swap market can be very costly‚ while hiking interest rates would (be) likely (to) engender further rand weakness."Cutting interest rates could be positive for foreign purchases of South African equities‚ but the Bank has yet to communicate a monetary policy stance sufficiently supportive of the recent reported weak state of the economy‚" Ms Bishop said.Barclays Research said in an early morning note that the rand could continue to recover some ground on the day as risk event was minimal. - RDM News Wire, BDlive..