JOHANNESBURG (Reuters) -The South African rand slipped on Tuesday, as the dollar bounced back supported by demand for safe havens over ongoing inflation concerns.
At 1549 GMT, the rand traded at 15.6050 against the dollar, 0.89% weaker than its previous close.
The dollar index strengthened as Treasury yields climbed and worries over a further acceleration in global inflation kept investors’ risk appetite at bay.
The South African government on Tuesday outlined new measures to curb steeply rising domestic fuel prices and ease pressure on consumers. The National Treasury said the cost of extending the fuel levy reduction is estimated at 4.5 billion rand in foregone revenue.
Data on Tuesday showed South Africa recorded a trade surplus of 15.49 billion rand in April, down from a revised surplus of 47.20 billion rand in March.
Its unemployment rate fell to 34.5% in the first quarter of 2022 from 35.3% in the final quarter of last year.
Other data showed that private-sector credit in South Africa rose by 5.99% year-on-year in April after rising by 5.92% in March.
The government’s benchmark 2030 bond was weaker, with the yield up 1.7 basis points to 9.835%.
While rising crude oil prices, which hovered around $123 a barrel, stoked inflation worries amongst investors, the local stock market stayed upbeat on the back of the fall in unemployment and an acceleration in private sector credit growth.
Shares on the Johannesburg Stock Exchange (JSE) rose on Tuesday helped by local banking stocks, industrials and real state companies even as major global indexes fell on inflation worries.
The benchmark all-share index rose 0.19% to 72,095 points and the blue-chip index of top 40 companies closed up 0.15% to 65,431 points.
However, miners played a spoilsport with Gold Fields leading the pack, losing a fifth of its market value in a single day after the company said it had agreed to acquire Canada-based Yamana Gold in a $6.7 billion deal. Investors were concerned the company was paying huge premium for the asset.
(Reporting by Olivia Kumwenda-Mtambo and Anait Miridzhanian; Editing by Neil Fullick and Andrea Ricci)
