Johannesburg - South Africa's rand was slightly weaker against the dollar on Tuesday ahead of the release of the central bank's quarterly bulletin, which will provide data on the current account deficit, a key driver of the currency.
At 07h40 GMT, the rand was around 0.25 percent softer against the dollar, fetching 12.131 versus its close of 12.0975 in the previous session.
“South Africa is dependent on foreign portfolio inflows to plug large current account deficit and with the start to US monetary policy normalisation deemed to be right around corner, investors are concerned how well the rand will hold up,” NKC African Economics said in a morning note.
Expectations of higher US interest rates this year are boosting the dollar, leaving emerging market currencies such as South Africa's vulnerable, especially as commodity prices also fall, undermining exports.
NKC said the rand would trade in a range of 12.05 to 12.25 for the day. The central bank data is due for release at 10am local time (08h00 GMT).
Government bonds extended gains from the previous session with the yield for paper maturing in 2026, the market benchmark , shedding 2.5 basis points to 8.275 percent.
Reuters