South African rand steadies, stocks open lower

South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg August 13 2014. REUTERS/Siphiwe Sibeko

JOHANNESBURG (Reuters) – South Africa’s rand held steady against the dollar early on Monday, a day after President Cyril Ramaphosa announced a further easing of the coronavirus lockdown from June 1, allowing the vast majority of the economy to return to production.

At 0710 GMT, the rand traded at 17.6050 per dollar, compared with its close of 17.5970 on Friday.

South Africa’s economy has been largely shut down since late March, when the government enforced severe restrictions to stem the spread of the novel coronavirus which locally has so far infected 22,583 people and killed 429.

Ramaphosa said on Sunday following broad consultations the cabinet had decided to move the country to “level three” of its five-level lockdown system from June 1.

“This comes as a welcome relief to many who have been severely negatively impacted by the lockdown,” said Bianca Botes, Executive Director at Peregrine Treasury Solutions.

On the stock market, the Top-40 index was down 0.19% while the broader all-share index slipped 0.15% in early trade.

Shares in South African food producer Tiger Brands fell more than 3% after the company reported a 35% fall in half-year headline earnings and deferred its interim dividend due to uncertainty around the coronavirus pandemic.

Government bonds firmed, with the yield on the 10-yer instrument due in 2030 down 6.5 basis points to 9.05%.

Reporting by Olivia Kumwenda-Mtambo; editing by Emelia Sithole-Matarise

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