(Reuters) -South Africa’s rand weakened against the dollar and the stock market rose on Monday, as softening inflation expectations prompted a reassessment of the prospects for aggressive interest rate hikes.
At 1530 GMT, the rand traded at 15.8350 against the dollar, 0.22% weaker from its previous close.
The dollar index, which measures the currency versus six rivals, was slightly down at 103.730.
Investec economist Annabel Bishop said in a research note that the rand has gained from its geographical distance from the Ukraine-Russia conflict and from Europe in general.
However, Bishop notes that the domestic currency would likely see further weakness if the U.S. continued to deliver large interest rate hikes this year and next.
On the Johannesburg stock market, the Top-40 index rose 2.55% while the broader all-share was up 2.23%.
Shares in technology investor Naspers and its subsidiary Prosus rose over 22% and 18% respectively after the companies announced their decision to sell their huge stake in Chinese software giant Tencent Holdings Ltd to fund stock buybacks.
The government’s benchmark 2030 bond was lower, with the yield up 6.5 basis points to 10.325%.
(Reporting by Bhargav Acharya in Bengaluru and Anait Miridzhanian in Gdansk; Editing by Louise Heavens and Bernadette Baum)
