Rand slips as FX reserves dip

JOHANNESBURG (Reuters) – The rand slipped against the dollar on Tuesday as central bank data showed South Africa's foreign reserves dipped in September and the U.S. currency rebounded after investors cashed in profits in the previous session after a run of recent gains.

The local unit eased to 11.2235 per dollar by 0614 GMT, 0.04 percent off its New York close of 11.2185 as the index measuring the greenback against major currencies reversed Monday's drop.

On Monday, the rand gained almost 1 percent as investors welcomed the appointment of a new reserve bank governor, Lesetja Kganyago.

Data from the South African Reserve Bank showed that net gold and foreign exchange reserves dipped to $43.329 billion in September from $44.24 billion in August.

Government bonds firmed in morning trade, with the yield on the benchmark paper due in 2026 down 1 basis point to 8.265 percent, reflecting a view among analysts that Kganyago will be tough on inflation.

The South African Chamber of Commerce and Industry releases its September business confidence index at 0930 GMT. The index recovered from a 15-year low in August after the end of strikes that battered the economy in the first half of the year.

However, economic indicators have continued to show subdued consumer and manufacturing activity, with a Reuters poll of economists expecting mining and manufacturing data out on Thursday to reveal a decline in production.

Pressure on the rand has also been applied by a strong dollar and signals from the U.S. Fed that it will raise interest rates in mid-2015.rand