Rand weakens after World Bank cuts growth forecast

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JOHANNESBURG – South Africa’s rand retreated early on Thursday after the World Bank cut its economic growth forecast and took a dim view of President Cyril Ramaphosa’s stimulus plan.

South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg, file. REUTERS/Siphiwe Sibeko

The rand was 0.29 percent weaker at 14.6875 per dollar at 0650 GMT, having closed in New York at 14.6450.

The currency is expected to trade between 14.4500 and 14.8500 to the dollar on Thursday, NKC African Economics wrote in a note.

The World Bank on Wednesday cut South Africa’s economic growth forecast for 2018 to 1 percent from an earlier forecast of 1.4 percent.

Investors remain skittish on the rand following the announcement on Sept. 21 of a stimulus programme that will see a reallocation of the budget but does not involve an injection of new cash.

In fixed income, the yield on the benchmark government bond due in 2026 flat at 9.090 percent.

Stocks are due open weaker at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 1.26 percent. – Reuters Africa

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