Rand rallies while Grexit looms

The rand firmed on Friday as the dollar wavered in the face of uncertainty over when the Federal Reserve would lift U.S. lending rates.

By 16.02pm the rand was up 0.7 percent to 12.1610 per dollar, nearing a three-week high achieved in the previous session as the greenback slumped to a one-month low following the Fed's decision on Wednesday not to raise rates.

The local unit has gained over 3 percent versus the dollar this week, having brushed 12-1/2 year lows in the previous week.

"Improvement in the fortune of the rand over the past two sessions has been significant," economists at Nedbank said in a note. However, the rand's rally will face stiff headwinds from local factors and a deadlock between Greece and its creditors, the analysts warned.

"Locally, fundamentals remain weak, and there is as yet no resolution regarding Greece, a factor which will undoubtedly weigh on all emerging markets."

Greek savers pulled more than 1 billion euros from banks in one day on Thursday, according to Reuters sources, stoking fears the country would default on its debt and pull out of the eurozone.

Late on Thursday central bank governor Lesetja Kganyago said a 25 percent tariff increase requested by power company Eskom could push inflation up by 0.5 percentage points if granted.

Local bonds were mostly flat, with the benchmark paper due in 2026 adding 0.5 basis points to 8.38 percent.

- Reuters