JOHANNESBURG (Reuters) -The South African rand was flat on Thursday, after plummeting a day earlier when a U.S. banking crisis spread to Europe and led to a sharp deterioration in global risk appetite.
At 1542 GMT, the rand traded at 18.4150 against the dollar, 0.01% weaker than its previous close.
The South African currency dropped around 2% against the dollar on Wednesday, shrugging off a smaller-than-expected contraction in local retail sales in January.
The stock markets were little changed, with the JSE’s blue-chip Top 40 up 0.21% and the broader all-share index closing 0.01% higher.
South African shares also plummeted on Wednesday, hitting their lowest this year.
“The underlying reason is actually inflation and interest rates as to why the market has been weak,” said Wayne McCurrie, portfolio manager with FNB.
Both local and global markets are likely to be “directionless” until next week’s U.S. interest rate decision, McCurrie added.
Recent data have pointed to ongoing weakness in Africa’s most industrialised economy, after a bigger-than-forecast fall in fourth-quarter gross domestic product.
Severe power constraints are hurting businesses of all sizes, leading the central bank to expect almost no economic growth this year.
South Africa’s benchmark 2030 government bond was down, with the yield at 10.100%.
(Reporting by Alexander Winning and Tannur Anders; Editing by Janane Venkatraman and Mark Potter)
