Rand weakens to near record after finmin axed

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December 10, 2015 9:18 AM

By 0601 GMT the rand had weakened 0.61 percent to 15.0665 per dollar compared to its close of 14.9750 in New York.

South African rand notes in a file photo. REUTERS/Siphiwe Sibeko

South Africa's rand weakened early on Thursday, edging towards the record low hit in the previous session when President Jacob Zuma removed Finance Minister Nhlanhla Nene.

Nene's dismissal sent the rand to a record low of 15.3000 as sentiment soured in an economy that is barely growing, squeezed by low commodity prices globally and the near certainty of an interest rate rise in the United States next week.

READ: Rand off record lows, stocks to open firmer

"The timing of this decision and what it entails is very negative for the Rand and credibility of the Finance ministry and sound financial institution framework," said Standard Bank trader Oliver Alwar.

"Investor sentiment will struggle given its timing so soon after ratings agencies met last Friday."

Fitch downgraded Africa's most advanced economy to just one notch above sub-investment grade last Friday.

Government bonds however held on to their gains, with the yield on the benchmark paper due in 2026 shedding 0.05 basis points to 8.830 percent., a level last seen in February 2014.

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