South Africa’s rand traded firmer on Monday, shrugging off a credit downgrade of both local and foreign currency ratings as investors kept faith in the high yield on offer.
* At 0650 GMT, the rand traded 0.62 percent firmer at 12.8675 per dollar compared to close of 12.9475 on Friday in New York.
* Moody’s on Friday lowered South Africa’s rating by a single notch from Baa2 to Baa3, the bottom of the investment grade table with a negative outlook, citing a recent abrupt cabinet reshuffle and reduced growth prospects.
* Uncertainty in developed market currencies following last week’s U.K. election, upcoming Federal Reserve interest rates decision, aided inflows into emerging markets.
* Bonds also firmer, with yield on benchmark 2026 government bond down 1 basis point to 8.48 percent.
* Stocks set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.66 percent.