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UPDATE 1-Rand drops on growth fears, Middle East tensions

Fri, 20th Sep 2019 16:54

JOHANNESBURG, Sept 20 (Reuters) - The South African rand dropped on Friday, weighed down by concerns about domestic economic growth and geopolitical tensions in the Middle East over attacks on Saudi Arabian oil facilities.

At 1340 GMT, the rand was down 0.8% at 14.9450 versus the dollar, putting it on course for losses of more than 2% this week.

The South African Reserve Bank left its main interest rate on hold at 6.5% on Thursday, disappointing some investors who had hoped that another rate cut could help stimulate the domestic economy.

Some analysts believe the window for the SARB to cut rates this year has now closed.

The rand was also knocked by the threat of tensions between Saudi Arabia and Iran boiling over into hostilities, which boosted the safe-haven appeal of the U.S. dollar.

As one of the most-traded emerging market currencies, the rand is highly susceptible to swings in global risk appetite.

South African government bonds also fell on Friday, with the yield on the benchmark 2026 instrument rising 8.5 basis points to 8.295%.

On the Johannesburg Stock Exchange, stocks traded stronger, helped by gains for precious metals miners as gold prices rose on the Middle East tensions.

The All-share index closed up 0.5% at 56,406 as gold miner Sibanye-Stillwater gained 7.34% to 19.02 rand, while Goldfields increased 3.81% to 74.73 rand.

Royal Bafokeng Platinum rose 8.4% to 39.51 rand and Northam Platinum increased 4.53% to 79.99 rand.

(Reporting by Onke Ngcuka and Alexander Winning; Editing by Dan Grebler)

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