A little loose

The rand finished weaker yesterday after government unveiled looser exchange controls in its mid-term budget, despite differences of opinion over the effect of the step.

Late afternoon the rand was trading 1,3% weaker than its previous close at $6,2749 a dollar, slipping from $6,225 just before the budget statement. However, given the currency's history of volatility, the movements were not dramatic.

But entrenched fears of money leaving the country in the short-term hit the rand, as well as news of wider budget deficits over the next three years, traders said.

The dollar gained after a less-dismal-than-expected read on US consumer confidence and a downbeat outlook for European growth spurred traders to buy back dollars after aggressive recent selling.

The dollar, which had plumbed to new eight-month lows against the euro overnight, gained on the euro and the Swiss franc after the European Commission said the balance of economic risks for the coming two years had shifted tot he downside and that further sharp euro gains would make matters worse.