JOHANNESBURG (Reuters) -The South African rand strengthened on Friday after a global financial crime watchdog removed the country from its list of countries subject to increased monitoring.
At 1536 GMT, the rand traded at 17.25 against the dollar, about 0.5% stronger than its close on Thursday.
Wichard Cilliers, head of market risk at TreasuryONE, said South Africa’s removal from the Financial Action Task Force’s “grey list” was a boost for the country’s reputation and financial system.
“It signals that South Africa has made strong progress in tightening its controls to combat money laundering and terrorist financing,” he said in a research note.
Africa’s largest economy was added to the list in February 2023 after criticism of its systems to combat money laundering and terrorist financing.
Cilliers added that being off the grey list should make it easier and cheaper for South African banks and companies to do business internationally, a confidence boost for investors and the rand alike.
“However, much of this was already priced into the currency,” he added.
The dollar last traded flat against a basket of currencies after U.S. inflation increased slightly less than expected in September, keeping the Federal Reserve on track to cut interest rates again next week.
On the Johannesburg Stock Exchange, the Top-40 index was last down 0.2%.
South Africa’s benchmark 2035 government bond was firmer, with the yield down 5 basis points to 8.88%.
(Reporting by Sfundo Parakozov and Anathi Madubela. Editing by Alex Richardson and Mark Potter)
