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South Africa's rand shrugs off downgrade as high yield draws investors
June 12, 2017 / 6:58 AM / 6 months ago

South Africa's rand shrugs off downgrade as high yield draws investors

JOHANNESBURG, June 12 (Reuters) - South Africa’s rand traded firmer on Monday, shrugging off a credit downgrade of both local and foreign currency ratings as investors kept faith in the high yield on offer.

* At 0650 GMT, the rand traded 0.62 percent firmer at 12.8675 per dollar compared to close of 12.9475 on Friday in New York.

* Moody’s on Friday lowered South Africa’s rating by a single notch from Baa2 to Baa3, the bottom of the investment grade table with a negative outlook, citing a recent abrupt cabinet reshuffle and reduced growth prospects.

* Uncertainty in developed market currencies following last week’s U.K. election, upcoming Federal Reserve interest rates decision, aided inflows into emerging markets.

* Bonds also firmer, with yield on benchmark 2026 government bond down 1 basis point to 8.48 percent.

* Stocks set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.66 percent. (Reporting by Mfuneko Toyana; Editing by Joe Brock)

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