Rand Drops From 6-day High As South African Central Bank Trims Base Rate To 7%
August 13 2009 - 4:56PM
RTTF2
The South African rand pares its previous sessions' gains
against the US dollar during early New York trading on Thursday
after the South African central bank decided to slash its key
interest rate by 50 basic percentage point to 7 percent.
The rand reached a low of 8.074 against the US dollar by 9:45 am
ET, down by more than 1.6 percent from a 6-day high of 7.9433 hit
around 8:10 am. If the rand drops further, support is seen around
the 8.10 level. The dollar-rand pair closed Wednesday's trading at
8.0754.
South Africa' central bank unexpectedly lowered its key interest
rate to 7% from 7.5%, saying that the domestic economy is lagging
behind the international developments. In its previous rate-setting
session, which was in June, the central bank held its key rate
unchanged at 7.5%.
Central bank Governor Tito Mboweni said there are encouraging
signs that the global slowdown may have reached its lower turning
point, although the speed and extent of the recovery are still
subject to a high degree of uncertainty.
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