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Moves in developing nations lift rand

January 29, 2014

The rand was among 19 of 24 emerging-market currencies that gained after India's central bank unexpectedly raised interest rates and as the regulator in Turkey said it would take measures necessary for price stability. The Reserve Bank will leave its benchmark repurchase rate on hold at 5 percent today, according to all 25 economists surveyed by Bloomberg . At 5pm yesterday, the rand was bid at R11.0599 to the dollar, 6.99c lower than at the same time on Monday. Traders were supporting the rand at about R11 to the dollar currently, Rand Merchant Bank currency strategist John Cairns said. Weaker Chinese manufacturing, political turmoil from Turkey to Thailand and the devaluation of Argentina's peso shook investor confidence as the Federal Reserve pares stimulus that fuelled inflows into emerging markets. "While short-term respite is likely after an extended and sudden move, continued worries over the slowdown in China and a likely further tapering of US stimulus this week is likely to maintain structural negative sentiment towards emerging markets currencies," Nedbank Group analysts including Mohammed Nalla said. Pretoria News

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Source: Pretoria News (South Africa)

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