South African rand stabilises after steep fall

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JOHANNESBURG – South Africa’s rand stabilised early on Friday, after falling steeply the previous session when the central bank slashed its growth forecast for this year.

At 0650 GMT, the rand traded at 13.5500 versus the dollar, 0.07 percent weaker than its close on Thursday.

The rand fell more than 2 percent on Thursday, after the South African Reserve Bank lowered its 2018 growth forecast to 1.2 percent from 1.7 percent and left its main lending rate unchanged.

The downgrade mirrors pessimism among independent economists, who have warned that the South African economy remains fragile despite a spike in business confidence after Cyril Ramaphosa replaced scandal-plagued Jacob Zuma as president.

Ramaphosa is trying to rejuvenate the economy and woo investors after a decade of stagnation under Zuma.

Stocks were set to open higher at 0700 GMT, with the Johannesburg Stock Exchange’s Top-40 futures index up 0.19 percent.

Government bonds were slightly weaker, with the yield on the benchmark instrument due in 2026 up 2.5 basis points to 8.77 percent.