South Africa's Rand Gains Second Day on China Stimulus, Barclays

South Africa’s rand gained for a second day against the dollar as monetary stimulus in China fueled investor appetite for riskier assets and after Barclays Plc said it won’t immediately sell its stake in its local unit.

The currency of Africa’s most-industrialized economy advanced 1 percent to 15.7160 per dollar by 10 a.m. in Johannesburg, bringing its gain in the past two days to 2.8 percent. The rand strengthened 0.9 percent to 17.1073 against the euro, and 0.6 percent to 21.9604 versus the pound. Yields on benchmark government bonds due December 2026 dropped 4 basis points to 9.37 percent.

Stocks rallied, emerging-market currencies strengthened and crude oil climbed to an eight-week high after China’s central bank on Monday cut lenders’ reserve requirements, freeing up funds to help spur lending. Barclays said it will sell down its 62 percent stake in Barclays Africa Group Ltd. over two to three years as it refocuses its business.

The Chinese stimulus sparked “a return to a healthier appetite for emerging markets,” Ion de Vleeschauwer, chief dealer at Bidvest Bank Ltd., said by phone from Johannesburg. While the Barclays divestment is rand-negative in the long run, “what’s cushioning the blow is it’s not a one-off, big-bang approach,” he said.

The rand was also buoyed after President Jacob Zuma on Monday reassured investors amid reports of a feud with his finance minister, Pravin Gordhan. Zuma said Gordhan had his full support and dismissed reports that the finance minister had threatened to resign over a dispute with the head of the tax collections agency, a Zuma ally.

“That certainly has helped calm down the quite negative sentiment we’ve had since Friday,” De Vleeschauwer said.

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