Rand strengthens as govt promises to root out corruption

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The rand  continues to power ahead in value against the dollar. It strengthened by 11 cents on Monday to R12,06.

Economists say investors are confident that government is trying to root out corruption in state-owned enterprises.

The rand was at R12,17 to the dollar over the weekend.

With the new board of Eskom in place and the intention to remove executives implicated in corruption, there are new signals of a move towards clean governance.

The markets are now seeing South Africa as a more attractive in investment environment.

And it’s hoped that capital inflows will improve in the country.

Economy Analyst Gary Booysen says, “With the change in the board, it fed into the optimism things are starting to turn in the right direction. Markets generally give companies the benefit of the doubt.”

The weakening of the dollar has also helped to boost the rand.

Analysts are optimistic that the strengthening of the rand will help the inflation rate to decline even further and this could lead to a possible interest rate cut in the near future.

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