THE South African rand weakened slightly against the U.S. dollar, as markets remained on edge following Russia’s invasion of Ukraine.
At 1503 GMT, the rand stood at 15.3600 against the dollar, down 0.18% versus its previous close.
The rand had weakened more than 2% on Monday to hit 15.4933, as the fallout from tougher sanctions imposed by the West on Russia and the deepening crisis rippled across financial markets and hit risk appetite.
A modicum of calm returned to currency markets on Tuesday, after high-level talks between Kyiv and Moscow. But the negotiations ended with no agreement other than to keep talking and nerves were still acute on Tuesday as a huge Russian armoured column bore down on Kyiv and invasion forces fired rocket barrages into the centre of the country’s second-largest city Kharkiv.
“All eyes remain on the Ukraine and Russian war, which continues to rage on, despite crippling sanctions on Russia,” Citadel Global Director Bianca Botes said in a note.
“The rand remains stable but on the weaker end of the scale, with a cautious approach being the best approach.”
Investec also warned in a note that the conflict looked set to intensify, and the rand was therefore at risk of further weakness.
The local stock market on the other hand was up, breaking with Europe, where stocks tumbled as markets struggled with the massive uncertainty caused by Russia’s invasion.
The Johannesburg Stock Exchange’s Top-40 Index, though, ended the day 1.4% higher at 70,584 points, with the broader All-Share Index also up 1.34% to 77,111 points.
Local miners, benefiting from a soaring oil and gold price, led the gains. Coal miner Exxaro however was the biggest winner of the day, rising 8.81% after it flagged an up to 64% increase in annual profits.
Government bonds weakened slightly, with the yield on the instrument due in 2030 rising 2.5 basis points to 9.475%.