South Africa's rand, bonds weaker in think trade
JOHANNESBURG (Reuters) - South Africa's rand was on track for its second consecutive daily loss against the dollar on Monday, weighed down by a gloomy global economic outlook which dented emerging market sentiment.
But local markets were reassured that monetary policy remains intact after a senior official from the ruling ANC said there was no need for discussion of the central bank's mandate, as the Bank was already aware it must pursue inflation targeting with economic growth in mind.
The ANC's powerful labour union allies have in the past accused the Reserve Bank of blindly focusing on its mandate to keep inflation within a 3-6 percent target band at the expense of economic growth.
The rand took most of its direction on Monday from internatonal market trends, with a raft of recent economic data pointing to weak global growth.
The local currency hit a session trough of 7.59 against the dollar, its weakest level in seven days, and was 0.42 percent weaker at 7.5531 by 1639 GMT compared with Friday's close at 7.5185.
Bearish comments last week out of the U.S. Federal Reserve, a lower growth forecast for China and weak PMI data out of Europe were all weighing against the rand, ETM market analyst Sean McCalgan said.
"It's really a combination of a weaker growth picture in the short term and I think that's the bulk of where the rand is taking its direction from," McCalgan said.
"From a sentiment perspective, the guys locally have been given reason to stay with their short rand positions for now with data offshore not coming out as expected."
Government bonds also weakened slightly in dull trading ahead of Tuesday's weekly Treasury debt auction. Continued...