South African rand flat but market nervous after last week’s record low

A street money changer counts South African Rands in Harare, Zimbabwe. REUTERS/Philimon Bulawayo

JOHANNESBURG (Reuters) – The South African rand was broadly flat in early trade on Monday, but market players were on edge after the currency struck a record low last week.

The rand has had a torrid May, battered by crippling power cuts, a U.S. allegation that a Russian ship picked up weapons in South Africa last year, and the central bank fuelling concerns of further currency weakness.

At 0622 GMT, the rand traded at 19.6450 against the dollar, not far from its Friday closing level of 19.6625 and down about 7% against the greenback this month.

READ MORE: South African rand recovers from ‘panicked’ record low

It hit a new all-time low of 19.8175 early on Friday after the South African Reserve Bank raised its main interest rate by 50 basis points but failed to impress some traders and economists.

“The market is nervous, and it will not take much to run again, and we haven’t even yet established any form of a range,” said Rand Merchant Bank analysts in a morning note.

READ MORE: Rand falls to record low, recovers after authorities dent Russian arms shipment

Public holidays in the U.S. and Europe on Monday may mean rand trading is thinner than usual at the start of the week.

This week’s domestic economic data releases including private sector credit extension for April, April budget figures and April trade numbers.

South Africa’s benchmark 2030 government bond was marginally stronger in early deals, with the yield down 2 basis points to 11.095%.

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