(Reuters) -South Africa’s rand was flat against the dollar on Monday, helped by a quiet trading session amid a holiday in the United States, while stocks rose on higher oil prices as worries over tight supply outweighed recession fears.
At 1544 GMT, the rand traded at 16.3400 against the dollar, close to its previous close of 16.3375.
The dollar index stood at around 105.220, not far below last month’s two-decade high of 105.790. Some currencies gained against the safe-haven dollar, with the U.S. markets closed for Independence Day.
However, analysts in South Africa have cautioned that the rand is not out of the woods and faced risk factors that could further weaken the currency, which hit a 20-month low last week.
“Q3.22 is still at risk of marked weakness, both for the rand and for all risk assets, with lower liquidity levels in global financial markets,” Investec analyst Annabel Bishop said in a research note.
Should the current degree of power cuts by state power utility Eskom continue into the third quarter, it risks pushing South African economy into a recession, she warned.
Late last month, Eskom started implementing the worst power cuts South Africa has seen in more than two years, blaming it on a labour strike hampering efforts to repair malfunctioning units.
Shares in the Johannesburg Stock Exchange (JSE) rose, mirroring the gains in global equities, which were helped by a bounce in oil as supply concerns driven by lower OPEC output, unrest in Libya and sanctions on Russia outweighed fears of a global recession.
Overall on the JSE, the All-Share index rose 2.08% to 67,025 points, while the Top-40 index closed 2.11% higher at 60,902 points.
The government’s benchmark 2030 bond was lower, with the yield up 5.5 basis points at 10.480%.
(Reporting by Anait Miridzhanian in Gdansk and Bhargav Acharya in Bengaluru; Editing by Louise Heavens and Alison Williams)
