The rand has shown resilience this month despite its tag as a proxy currency for emerging-market sentiment, while money from non-residents has been pouring into South Africa’s bonds and stocks in recent days.The country’s currency is one of just five among 24 developing-nations that has advanced against the dollar in March, with Colombia’s peso posting the biggest gains among the group.
“Risk off is in full swing,” said Cristian Maggio, the London-based head of portfolio strategy at TD Securities. “While I would normally look at the rand as one casualty of the general mood, in this case we can certainly say that its distance from the conflict is shielding it from the worst.”Rand-bonds are being bought up even as emerging market debt more generally has been hard hit in the selloff sparked by Russia’s invasion of Ukraine.
Non-residents on Monday bought the most South African debt on a net basis in six weeks, based on settled trades data reported to the JSE, which may differ from transactions and/or daily flows. Inflows from foreign buyers this year stand at about 20.7 billion rand based on the JSE’s data and Bloomberg calculations.Yields on benchmark bonds rose for a third day on Tuesday, climbing 26 basis points to 10.62% by 12:32 p.m. in Johannesburg. That’s the highest since April 2020.
The market has been buoyed by its exposure to the miners, which have benefited from soaring metals prices as importers steer clear of Russian products, and to precious metals stocks — a haven in times of volatility. Foreign inflows since the beginning of the year have now reached 20.76 billion rand.
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