Rand Falls After Finance Minister Says It’s Too Strong

The South African rand weakened today as the words of the South Africa’s Finance Minister about the rand being too strong outweighed the influence of the outlook for the good US unemployment reports today bolstering the higher-yielding assets.

The rand has rallied 36 percent versus the US dollar since the beginning of the previous year as the low interest rates in the developed nations spurred the investors to loan at low interest rates for buying higher-yielding assets in the countries with low interest rates, making attractive the currency of the South Africa with its 6 percent benchmark interest rate. Pravin Gordhan, South Africa’s Minister of Finance, said that “the rand is too strong given the South African context, and we share the concerns of other emerging markets”.

USD/ZAR went up from 6.880 to 6.924 as of 10:58 GMT today after it dropped to 6.850.

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