South African rand slips after OPEC+ oil cut

April 03, 2023 08:58 AM SAST | By Reuters
Image source: Reuters

(Reuters) - The South African rand slipped in early trade on Monday as the dollar firmed following a decision by major oil producers to reduce supply.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, announced on Sunday its decision to reduce oil supply by about 1.16 million barrels per day (bpd).

The decision pushed oil prices up over 6% on Monday and drove dollar strength.

At 0612 GMT, the rand traded at 17.9100 against the dollar, 0.59% weaker than its previous close.

The dollar index which measures the currency against six rivals, last traded at 102.990, up about 0.039%.

The jump in oil prices may prompt the U.S. Federal Reserve to raise interest rates once again when it meets next month, analysts said.

"...the jump in oil prices.. has added a new dimension to global inflation risks," said ETM Analytics in a research note.

The government's benchmark 2030 bond was marginally weaker, with the yield up 1 basis point to 9.840%.

(Reporting by Tannur Anders; Editing by Bhargav Acharya and Bernadette Baum)

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